RBI panel to advise on export

On the basis of such interactions, the group would suggest changes designed to reduce repetitive documentation requirements and improve the quality and reduce cost of non-fund based services to exporters.

The group will also review the operation of the "exchange earners foreign currency" scheme to suggest improvements in the scheme and making it more exporter-friendly.

Detailing the external developments in his mid-term review, RBI governor Dr Bimal Jalan said while the importance of accelerating the rate of exports growth could hardly be over-emphasised, it must bestressed that provision of rupee export credit at present rates was not sustainable in the long run.

For most categories of export credit, the interest rate was nine per cent per annum till march 1999, after which it would revert back to 11 per cent.

Reacting to the policy, Ramu S Deora, President of FIEO, said the credit policy has given the right boost to the export houses first by retaining the rate of interest on export finance at nine per cent post and pre-shipment and fixing the refinance to banks at seven per cent. This has injected into the system liquidity of Rs 4,838 crore compared to just about Rs 24 crore in the corresponding period last year. It means that the credit has been increased because refinance rate is fixed at seven per cent.