The extension of the RBI deadline for pre-post-shipment export credit sanctioned by banks with a 40 basis point reduction in the repo policy rate will ease the exporters’ woes, but the problem is more, creating an existential crisis for the export sector Is doing, the Engineering Export Promotion Council (EEPC) said in a release issued on Friday.
As RBI Governor Shri Shaktikanta Das stated clearly in his policy statement that the global economy is “headed for a recession”, much more needs to be done for the highly employment-oriented export sector. Although postponement and working capital exemptions are welcome, exporters will need direct financial support to survive in trade. These measures can be in the form of waiver of electricity user duty, reduction of rent at ports, freight assistance and wage support for workers.The RBI hasdecided to extend the maximum permissible period of pre-shipment and post-shipment export credit from one year to 15 months already sanctioned by banks, for disbursements made till 31 July 2020. This should ease the pressure, but liquidity transmission must be increasingly affected, along with a reduction in interest rates, if banks do not have too much attachment to the banks’ case to case approach.