‘Talks on with RBI to include export sector under PSL’

Commerce and Finance Ministry are engaged with the Reserve Bank to include export sector under the priority sector lending of banks, a move that will help exporters get easy and affordable credit. A senior commerce ministry official said that credit is expensive in India.

'Commerce ministry has been successful to take the Finance ministry on board to engage with RBI to workout a package for the export sector, that export sector lending should be a priority sector,' Joint Secretary in the Commerce Ministry A K Tripathy said here at a function. Indian exporters have been demanding inclusion of export credit in priority sector lending.

'If this materialises it will be a big game changer for the export industry,' he said. At present, only foreign banks are required to disburse 12 per cent of their credit under the priority sector to export companies. For other banks, export finance is outside the 40 per cent priority sector lending (PSL).

According to the the Federation of Indian Export Organisations (FIEO), the flow of credit to the export sector is declining and is a cause of concern.

Tripathy also said reduction in increasing transactions cost of exporters would help in pushing the country's exports.