Insurance premium reduced
The Government has taken following major steps to increase the flow of credit to micro, small and medium enterprises (MSME) exporters, Commerce and Industry Minister Piyush Goyal said in a written reply in the Rajya Sabha on 12 July 2019.
(i) raising interest equalization rate under Interest Equalisation Scheme (IES) from 3% to 5% for MSME exports;
(ii) including Merchant exporters under IES for Pre and Post Shipment Rupee Export Credit;
(iii) facilitating export under GST by permitting Letter of Undertaking in place of bond with no bank guarantee for exporting goods or services or both;
(iv) allowing merchant exporters to procure goods from domestic suppliers, for export, with nominal GST of 0.1%;
(v) provisional sanction of 90% GST refund amount for exports within 7 days;
(vi) reducing insurance premium rates by an average of 17% for export credit.
Department of Financial Services has informed that RBI is currently examining the priority sector lending norms for export credit and certain enabling guidelines are under consideration.
When issued, revised guidelines are expected to release additional Rs.350-680 billion export credit under priority sector.
RBI has also informed that it is not in favour of earmarking a part of foreign exchange reserves for export credit.
As per data compiled by RBI, the balance outstanding for export credit by all Scheduled Commercial Banks (SCBs) increased from Rs.185,591 crore as on 31 March 2015 to Rs.243,890 crore as on 31 March 2018 before declining to Rs.226,363 crore as on 31 March 2019. fiinews.com