RBI asks co-op banks to charge exporters 2 pc less

 Besides textiles and gems and jewellery, the export sectors which will get funds at lesser interest rates from urban cooperative banks (UCBs) are handicrafts, carpets, leather, marine products, and small and medium enterprises.

“The Government of India has decided to extend interest subvention of two percentage points with effort from June 1, 2009 till September 30, 2009 on pre and post shipment rupee export credit extended by scheduled UCBs holding AD category I licences, for certain employment oriented export sectors,” the central bank said in a notification.

As per the existing norms, UCBs are permitted to determine their own lending rates taking into account factors such as cost of funds and transaction costs with the approval of their boards.

“... scheduled UCBs holding AD category I licences will now charge interest at two percentage points below the interest rates charged from exporters in other categories of export sectors,” it said.

The initiative is aimed at boosting the country’s exports which have been declining since October 2008. 

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