Leading industry and export chambers like PHD Chamber of Commerce and Industry and Federation of Indian Export Organisation on Tuesday demanded 1.0 per cent cut in bank rate and cheaper export finance in Reserve Bank of India's' forthcoming busy season credit policy.
"RBI should reduce the bank rate by 1.0 per cent and cash reserve ratio by 1.0 per cent in the forthcoming busy season credit policy," PHD Chamber of Commerce and Industry said in its suggestion to RBI.
Borrowers, who have never defaulted, should be offered credit at prime lending rates only and the maximum range should not be over 2.0 per cent above PLR, it said.
The chamber said interest rate spread between lending and borrowing rates should not be more than 4.0 per cent.
"RBI may evolve a mechanism so that there is no discrimination, simply on the basis of magnitude of funds availed by borrowers," it said.
In view of the declining export growth rate to 8.99 per cent to $22.50 billion till August, the Federation of Indian Export Organisation pitched for rationalisation of interest rate slabs towards pre-shipment foreign currency and local currency loans.
It also said banks should offer concessional export finance for 360 days, offer pre-shipment credit in foreign currency, packing credit interest at par with tax loans, cut in overdue charges and reduction in charges on renewal and enhancement of credit limits.
To stabilise the appreciating rupee, FIEO suggested that RBI should open a "dollar window" to lend dollars to Indian banks at Libor rates, which could be utilised in meeting the forex needs of exporters.
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