What changed
RBI accepted a Working Group's recommendations. Banks must ensure timely disposal of applications, raise all queries at once, and evolve guidelines to avoid insisting on collateral. The Gold Card scheme must be expedited for eligible SME exporters within three months.
What it means for you
Banks need an attitudinal change to better serve small and medium exporters, reducing delays. This could increase credit flow but requires operational changes, including training staff and updating procedures.
What you must do
- Review and streamline export credit application procedures to ensure single-query processing and timely disposal.
- Expedite issuance of Gold Cards to all eligible SME exporters within three months and report compliance.
- Organize training sessions for upcountry SME exporters on form filling, in coordination with SSI/export bodies.
- Ensure internal/concurrent audit comments on adherence to prescribed time frames for export credit disposal.
- Adopt the simplified loan application form to be devised by IBA in consultation with FIEO.
Who it affects
All scheduled commercial banks (excluding RRBs), Small and medium exporters, State Level Export Promotion Committees (SLEPCs), Indian Banks Association (IBA)
What is the Gold Card scheme and why is RBI pushing it?
The Gold Card scheme offers faster, collateral-free export credit to eligible exporters. RBI noted low uptake and wants banks to issue cards to all eligible SME exporters within three months to boost exports.
How should banks handle export credit applications now?
Banks must raise all queries in one go, avoid piecemeal requests, and dispose of applications within prescribed time frames. Internal audits must comment on adherence.
What about collateral for export credit?
RBI advises banks to evolve guidelines so that collateral security is not insisted upon as far as possible, especially for small exporters.