TEA: Extend export refinance scheme

COIMBATORE: The Tirupur Exporters Association (TEA) has appealed to the RBI to extend the ‘export refinance scheme’ to banks to augment export credit.

Expressing apprehensions that banks will increase their lending rate by taking into account the increase in repo rate by 0.25 per cent, KM Subramanian, president of TEA said it would directly affect the financial performance of the exporting units, which have already been suffering due to contraction in export demand.

He said that Tirupur knitwear exports have recorded negative growth since August 2022 in dollar terms, but was hopeful that exports will bounce back gradually in the coming months.

To insulate from the increase in repo rate, Subramanian requested the RBI Governor to extend the export refinance scheme to banks to augment export credit. He noted that under such a mechanism, banks may be encouraged to provide export credit in Rupee to exporters and the same amount can be refinanced by the RBI at the repo rate.

Further, Subramanian said that such a positive step will bring down the interest cost for export credit providing much needed competitiveness to exports.