Ref.IECD.No.20/04.02.02/2001-02

April 19, 2002

The Chairmen/Chief Executives
of all Commercial Banks

Dear Sir,

Please refer to Circular IECD No.EFD 15/04.02.02/96-97 dated November 19, 1996 wherein it was advised that the cost of premium in respect of the Whole Turnover Post-shipment Guarantees taken by banks may be absorbed by themselves and not passed on to the exporters.

2. It has come to our notice that some banks have been recovering the premium in respect of Whole Turn Over Post-Shipment Guarantee from the exporters. We, therefore, reiterate that the cost of premium in respect of the Whole Turnover Post-shipment Guarantees taken by banks may be absorbed by the banks themselves and not passed on to the exporters.

3. Please acknowledge receipt.

Yours faithfully,

(S.D.Sapkal)
Deputy General Manager