Port Wings News Network:
Reacting to the announcements made by the RBI on 22 May, Mr Mohit Singla Chairman, Trade Promotion Council of India (TPCI) said, “The financially stressed exporters will benefit from unforeseen circumstances beyond control, on account of importers inability to pay within six months and thus causing offence in India. Therefore, increasing the time of outward remittance from 6 months to 12 months, will surly help as they will have the longer payment time.”
The loan moratorium increase from 3 months to 6 months is a very welcome move allowing an exporter with a wider window to manage financial conditions better. This will ease the pressure from borrowers of one-time accumulated payment by increasing the payback cycle, he added.
Further, Singla said, “Extending the swap facility for Exim banks, extension of import payments from 6 month to 12 month and increasing the exporters’ length of credit to 15 months from one year are the much needed steps which will solve the working capital woes for the traders to a considerable extent and ease the pressure of making immediate payment.”
Monetary Policy Committee (MPC) decision to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 40 bps to 4.0 per cent from 4.40 per cent will smooth liquidity for short term and will help in keeping consumer price regulated, Singla added.