RBI not to include export credit in priority sector list
The central bank has communicated its views to the commerce ministry, saying that if export credit is included in the priority sector list, then it could crowd out loans under this window to sectors like agriculture and medium small micro enterprises (MSMEs).
November 07, 2013 / 10:30 IST
The Reserve Bank of India (RBI) has decided not to include export credit in the priority sector list reports Rituparna Bhuyan quoting sources.
The recommendation on including exports in the priority sector list was made by a RBI appointed panel under G Padmanabhan. The central bank has communicated its views to the commerce ministry, saying that if export credit is included in the priority sector list, then it could crowd out loans under this window to sectors like agriculture and micro, small and medium enterprises (MSMEs). Hence, RBI is not in favour of including export credit in the priority sector list, sources told CNBC-TV18Also read: BofA-ML says time is right for RBI to taper oil swap window Sources in Federation of Indian Export Organisation, or FIEO told CNBC-TV18 that it had recommended a cap export credit under the priority lending window, to take care of concerns. "That way, exporters would have got loans that would have been cheaper by 1 to 2 basis points. Also, government would have been able to stop the interest subvention scheme for exports, where it is currently paying banks for offering export credit at cheaper rates “a FIEO official said Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
