RBI provides impetus to exports; relaxes ECR

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RBI provides impetus to exports; relaxes ECR
The Reserve Bank of India raised the Export Credit Refinance limit from 15% to 50%, which will help the exports and provide additional liquidity to banks.

Export Credit Refinance Facility (ECR) is a scheme which provides short-term pre-shipment and post-shipment financing to direct/indirect exporters.

RBI, on the basis of banks' eligible outstanding rupee export credit (pre-shipment and post-shipment), provides export credit refinance (ECR) facility to banks. All authorized dealers in foreign Exchange (excluding RRBs) and who have extended export credit are eligible to avail the facility.

RBI said, with a view to enhancing the credit flow to the export sector, it has been decided to enhance the eligible limit of the ECR facility for scheduled banks (excluding RRBs) from 15% of the outstanding export credit eligible for refinance to 50%, effective fortnight beginning June 30, 2012.

This will provide additional liquidity support to banks of over300 billion. The rate of interest charged on the ECR facility will continue to be the prevailing repo rate under the LAF, which is currently 8.0%, further added.


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