'Limited impact' on industry

MUMBAI, SEPT. 24. The Reserve Bank of India's decision to cut interest rate on export credit by one percentage point will have limited impact on industry, according to the All India Association of Industries (AIAI).

The association said, since banks have different PLRs (prime lending rates) exporters would not be in a position to avail of the credit at the same rate from banks.

In a statement, the AIAI President, Mr. Vijay Kalantri, today said the RBI should re-examine the export credit interest rates with reference to the Bank Rate. The new system must also introduce a healthy competition among the banks and provide exporters a wider choice to avail of banking services in terms of interest rate, quality of service and transaction cost.

Mr. Ramu Deora, a leading exporter and former chairman of the Federation of Indian Export Organisation (FIEO), said the RBI's decision was a 'drop in the sea water.' According to him, the central bank's decision can be termed as a complementary to the U.S. Federal Reserve's interest rate cut for the eighth time in sixth months.

- UNI

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