April 2002

National Council of Applied Economic Research, New Delhi

INDIA

Contents

Chapter 4 The Export Credit System: Analysis of Survey Findings

Chapter 5 Interpretation of the Survey Results

References

Annex 1 Issues Relating to Simplification of Procedures for Hassle free Delivery of Export Credit

Following tables have not been included in this Summary

Table No. 3.3 to 3.6, 3.8 & 3.9

Chapter 4 - The Export Credit System: Analysis of Survey Findings

4.2.2 Banks’ Adherence to RBI’s Guidelines on Export Credit

One of the objectives of the study is to check whether banks are adhering to RBIs guidelines for export credit delivery system. Though most of the discussion has been reported in sub-section 4.2.1, we shall compute "banks’ adherence index" (BAI) based on answers to 30 different questions selected from the bankers’ questionnaire. Questions included in the calculation of BAI along with marks allotted to them are as follows:

1. Sanctioning export credit to new exporters (one mark if "yes" and zero mark if "no").
2. Catering to the needs of small exporters (one if "yes" and zero if "no").
3. Procedure adopted for getting sanction of export credit from higher authorities (zero if the branch sends it to regional office which itself is not authorised to sanction such amount, one if it sends it directly to the appropriate sanctioning authority, and two if it undertakes both the steps simultaneously).
4. Procedure for obtaining additional ad-hoc export finance is simpler than getting the original grant limit (one if "yes" and zero "otherwise").
5. Assessment undertaken by the bank branch in the case of consortium-finance even if the consortium leader has already made an assessment (zero if "yes" and one if "no").
6. The bank branch permits its clients to avail of multiple banking facility (one if "yes" and zero if "no").
7. Fast sanctioning of loans for exporters with good track record (one if "yes" and zero if "no").
8. Provision for liberal sanctioning of export credit during the years of low export growth (one if "yes" and zero if "no").
9. Allowing exporters to interchange pre- and post-shipment limits (one if "yes" and zero if "no").
10. Time taken by the bank branch to sanction fresh credit limit (one if done within "45 days" and zero if time taken is above 45 days).
11. Time taken by the bank branch to sanction enhanced credit facility (one if done within "45 days" and zero if time taken is "above 45 days").
12. Time taken by the bank branch for renewal of existing limits (one if done within "30 days" and zero if time taken is "above 30 days").
13. Time taken by the bank branch to sanction ad-hoc credit limit (one if done within "15 days" and zero if time taken is "above 15 days").
14. Time taken by the bank to sanction post-shipment credit limit (one if done within "45 days" and zero if time taken is "above 45 days").
15. Processing fee for sanctioning of fund-based credit limit (one if "up to 0.1 per cent" and zero if "above 0.1 per cent").
16. Processing fee for sanctioning of non fund-based credit limit (one if "up to 0.05 per cent" and zero if "above 0.05 per cent").
17. Time taken in dispatching export documents for realisation (one if it is done "within 2 days" and zero if it takes "more than two days").
18. Compensating exporters in case there is delay in dispatching export documents (one if "yes" and zero if "no").
19. On decision of approval of trade discount taken at the branch level (one if "yes" and zero if "no").
20. On decision of approval of the reduction in invoice value taken at the branch level (one if "yes" and zero if "no").
21. On decision of approval of writing-off the unrealised bills taken at the branch level (one if "yes" and zero if "no").
22. On decision of approval of credit to exporters on elongated terms taken at the branch level (one if "yes" and zero if "no").
23. On decision of approval of delayed submission of export documents taken at the branch level (one if "yes" and zero if "no").
24. On decision of approval of permission to extend time for realisation of proceeds taken at the branch level (one if "yes" and zero if "no").
25. On decision of approval to refund export proceeds in the case of rejected goods taken at the branch level (one if "yes" and zero if "no").
26. On decision to approve export claims taken at the branch level (one if "yes" and zero if "no").
27. On organisation of exporters meets to facilitate interaction between the bank branch and its exporting clients (one if "yes" and zero if "no").
28. On FOREX staff having attended some training course on export operations/policy (one if "yes" and zero if "no").
29. On compensation for the delay if the bank branch delays crediting the realised export proceeds to exporter’s account (one if "yes" and zero if "no").
30. On exporters getting help from the bank branch when the overseas buyer fails to pay the export proceeds (one if "yes" and zero if "no").

The BAI has thus been given a range from 0 to 31. The same has been converted into a scale of 0 to 100 and classified in four groups, viz. poor (BAI up to 50), average (BAI between 50 and 60), good (BAI between 60 and 80) and excellent (BAI more than 80). Table 1 provides distribution of banks groups by region according to bank index. At the all-India level, about 8.3 per cent of bank branches fall under the poor category with regard to their adherence to the RBI’s guidelines for export credit delivery system. In contrast, about 13.5 per cent of the bank branches get excellent grade. About 21 per cent of all the bank branches turn out as average and 57 per cent as good.

Analysing the excellent grade for different groups of banks, foreign banks stand apart with a distinction. About 29 per cent of all the foreign bank branches under survey qualify as excellent. In the case of SBI and associate branches as low as 6 per cent turn out as excellent. The nationalised and private bank branches are "revealed" mediocre performers with less than 15 per cent turning out as excellent.

The distribution of excellence across four zones is quite interesting. The SBI and associate bank branches have received the least proportion of excellent awards in all four zones except in the western region where the nationalised banks have this position. Incidentally, not a single SBI and associate bank branch has been rated as excellent in the eastern region and only 4 per cent have done so in the northern region.

"Revealed" excellence of the foreign bank branches is the highest in northern region with 75 per cent branches having turned out as "excellent". The proportion is much lower in other three regions with 25 per cent in eastern region, 20 per cent in western region and only 17 per cent in southern region.

The nationalised banks "reveal" relatively better excellence in western and southern regions as compared to northern and western regions. Only 7 per cent of the nationalised bank branches have "revealed" themselves as excellent in the eastern region.

Private Indian banks seem to be doing relatively better in western and southern regions as compared to northern and eastern regions. Not a single private bank branch is "revealed" excellent in eastern region.

The foregoing discussion is based on the excellent grade. The situation appears brighter if one also looks into "revealed" good grades of all the banks. In fact, three-fourths of the private and foreign bank branches have revealed themselves as above average, i.e. good and excellent. The corresponding proportion is somewhat less than three-fourths in the case of nationalised bank branches but low in the case of SBI and associate bank branches. Only three-fifths of the SBI and associate bank branches are above average.

Table 1

Percentage Distribution of Banks on the Basis of Index on Adhering to RBIs Guidelines

Bank Groups/Region	Banks Score on Adhering to RBI Guidelines
	Poor		Average	Good	Excellent	All
Northern Region
Group 1	12.0	32.0		52.0	4.0	100.0
Group 2	5.2	13.8		69.0	12.1	100.0
Group 3	0.0	18.2		72.7	9.1	100.0
Group 4	25.0	0.0		0.0	75.0	100.0
All Bank Groups	7.1	18.4		62.2	12.2	100.0
Eastern Region
Group 1	25.0	37.5		37.5	0.0	100.0
Group 2	18.8	12.5		43.8	25.0	100.0
Group 3	0.0	25.0		75.0	0.0	100.0
Group 4	0.0	25.0		50.0	25.0	100.0
All Bank Groups	15.6	21.9		46.9	15.6	100.0
Western Region
Group 1	16.7	22.2		50.0	11.1	100.0
Group 2	8.5	27.1		57.6	6.8	100.0
Group 3	3.6	28.6		50.0	17.9	100.0
Group 4	0.0	30.0		50.0	20.0	100.0
All Bank Groups	7.8	27.0		53.9	11.3	100.0
Southern Region
Group 1	6.7	13.3		73.3	6.7	100.0
Group 2	8.1	18.9		51.4	21.6	100.0
Group 3	8.3	12.5		62.5	16.7	100.0
Group 4	0.0	16.7		66.7	16.7	100.0
All Bank Groups	7.3	15.9		59.8	17.1	100.0
All India
Group 1	13.6	25.8		54.6	6.1	100.0
Group 2	8.2	19.4		58.8	13.5	100.0
Group 3	4.5	20.9		59.7	14.9	100.0
Group 4	4.2	20.8		45.8	29.2	100.0
All Bank Groups	8.3	21.1		57.2	13.5	100.0

Group 1: SBI and associate banks

Group 2: Nationalised banks

Group 3: Private (including Co-operative) banks

Group 4: Foreign banks

4.3 Exporters’ Perspective

The level of satisfaction of 1762 exporters surveyed in the present study has been analysed in this section. The tabulation of results of exporters’ satisfaction with export credit delivery system has been reported in Tables 4.E1 to 4.E94. In order to facilitate the analysis of results, the 32 product categories have been merged into 9 major categories (Table 2). We provide major observations on exporters’ level of satisfaction in sub-section 4.3.1. The expressed level of exporters’ satisfaction is detailed out in Tables 4.E85 to 4.E88. We also construct an "index of exporters’ satisfaction" by comprehending their mood as "revealed" through answers to several other questions in the questionnaire. The later exercise is similar to indexing the bankers’ adherence to the RBI guidelines. We report results of "revealed" satisfaction of exporters in sub-section 4.3.2 of this section. Exporters’ overall level of satisfaction, based on the response to one single question (Question 42 of exporter questionnaire) has been analysed using a simple econometric exercise in sub-section 4.3.3. There is a possibility of a bias, expected to be an overestimate of exporters’ level of satisfaction in response to question 42 in case the sample of exporters’ was selected based on the addresses provided by their bankers. An assessment of such a bias in exporters’ responses based on whether an exporter’s address had been taken from its banker or not is provided in sub-section 4.3.4. Finally, suggestions provided by those exporters who have granted "poor" and "very poor" levels of satisfaction in response to question 42 have been presented in sub-section 4.3.5.

Table 2: New Product Groupings

New Grouping	Old Product Categories
Readymade Garments	Readymade Garments
Textiles	Textiles
Handicrafts	Handicrafts, Handlooms, Hosiery, Agarbattis, Brassware and Carpets
Engineering Products	Engineering Products, Auto Components, Electronics, Textiles Machinery
Agro-products	Rice, Coffee, Tea, Coir Products, Spices, Jute Products, Soya Product and Tobacco
Other Products	Aluminium, Cycles, Granite, Iron Ore, Sea Food, Silk and Sports Goods
Chemicals	Basic Chemicals, Drugs & Pharmaceuticals, and Dyes & Chemicals
Leather Products	Leather Products
Diamonds, Gems and Jewellery	Diamonds, Gems and Jewellery

4.3.1 Analysis of Exporters’ Responses to the Exporter Questionnaire

4.3.1.A The Sample Profile: Spread by Type and Region

1. A total of 1762 valid responses from exporters have been analysed. About 73 per cent of these are manufacturer exporters, 24 per cent merchant exporters and about 3 per cent deal in both. Northern region has relatively higher proportion (85 per cent) of manufacturer exporters while the western region has relatively low proportion (61 per cent) of manufacturer exporters (Table 4.E1, Chart 4.9). About 35.6 per cent of all the exporters are from western region, 29.9 from southern region, 23.0 per cent from northern region and only 11.5 from eastern region (4.E2).

2. About 31 per cent of the exporters are registered as export house, another 12 per cent as trading house, star trading house and super star trading house, while 57 per cent do not belong to any of these categories. While nearly two-fifths of all the exporters in east and south are export houses, west has only one-fifth of its exporters in this category while north has about one-third of its exporters in this category (4.E3). Among all the export houses, the maximum is in south (37.5 per cent) and the minimum in east (14.9 per cent). Of small exporters who do not belong to any of the "house" category, a very large proportion of above 43 per cent lies in west while a very small proportion 10.2 per cent lies in east (4.E4).
3. Of all the responding exporters, about 32 per cent are export-oriented units (EOU) and about 3.7 per cent are under export promotion zones (EPZ). Responses from north and east zones contain relatively high proportion (above 45 per cent) of EOU while only about one-fourth of responding exporters in west and south zones are in this category (4.E5). Among all the EOU units about one-third lie in north and only one-sixth in east. Within EPZ units, the maximum concentration is in south (45 per cent) and the minimum in west (14 per cent) (4.E6).
4. About 13 per cent of the exporters are "small", 46 per cent "lower-medium", 22 per cent "medium" and 19 per cent "large" (4.E7, Chart 4.10). Among all the small exporters, nearly 48 per cent are in west and only 9 per cent in east. Large exporters have very high concentration in south (35 per cent) but relatively low presence in east (14 per cent). (4.E8, Chart 4.11).

4.3.1.B The Sample Profile: Sources of Finance

1. While about 58 of all exporters get their export finance from nationalised banks, 26 per cent depend on SBI and associates, 13 per cent on private banks and only 3 per cent on foreign banks. Nearly one-quarter of exporters in each of the four regions depend on SBI and associates for finance. (4.E9, Chart 4.12).

2. The distribution of bank branches catering to credit needs of exporters in four different regions is exactly same as the distribution of exporters themselves since, in the present study, each exporter is supposed to be associated with one major bank branch (compare 4.E10 with 4.E8). Whereas the proportional spread of SBI and nationalised banks is quite similar across four export zones of India, private and foreign banks exhibit varying proportional distribution (4.E10).

4.3.1.C Sanction of Credit Limits

1. About 70 per cent of all exporters find pre-shipment sanction grant application form "simple". In fact, another 13 per cent find it "very simple". Thus a majority of exporters (83 per cent) have no problem in filling the form. On the other hand, about 13 per cent of exporters find it "difficult" and only 3 per cent of the exporters find it "very difficult" (4.E11, Chart 4.13). Relatively large proportion of small and lower-medium exporters find this form difficult (4.E12, Chart 4.14). Within product categories, exporters of leather products; diamonds, gems and jewellery; and chemicals appear to be least satisfied while those of textiles; handicrafts; and engineering products most so (4.E13, Chart 4.15). With regard to the bank group association, exporters associated with nationalised banks are relatively least satisfied and those associated with foreign-banks most so (4.E14, Chart 4.16).


2. With regard to information and documents required along with export-credit grant application form, about 77 per cent of the exporters find it "reasonable" with only 17 per cent declaring this requirement as "not-reasonable" and 6 per cent not reporting. There seems to be some problem with exporters in east with only 58 per cent being satisfied, 39 per cent not satisfied and only 3 per cent not responding (4.E15). Within size classification, the level of satisfaction of medium exporters is relatively high and of small exporters relatively low (4.E16). Across various groups of export commodities, exporters of handicrafts, leather and "other" products being most satisfied and those of chemicals least so (4.E17). Exporters having dealings with SBI and private banks are relatively more satisfied than those with nationalised and foreign-banks (4.E18).
3. The level of satisfaction of exporters with the method of assessment for their credit requirements is as high as 86 per cent. Only 9 per cent exporters are not satisfied and another 5 per cent have not responded. Exporters in the east zone are relatively less satisfied as compared with exporters in other zones (4.E19). While medium exporters are relatively more satisfied the lower-medium exporters are less so (4.E20). Across product categories, exporters of chemicals and handicrafts are relatively most satisfied while those of leather products are least so (4.E21). Among the four bank groups, the nationalised banks impart the lowest level satisfaction to their exporter-clients (4.E22).
4. Two alternative methods of assessing credit requirements have been suggested by exporters across the country, viz. a) confirmed orders in hand; and b) past track record of the buyers (4.E23, 4.E24). In all, there have been 40 suggestions in favour of (a) and 38 in favour of (b) out of a total of 92 valid suggestions received.
5. About three-fourths or more of the exporters across four zones, four size groups, nine product categories and four bank groups are satisfied with five major aspects of credit sanctioning by the banks. These include a) adequacy of amount sanctioned, b) terms of sanction, c) margin stipulated, d) rate of interest charged and e) documentation. The level of satisfaction is relatively low in east the zone where, interestingly, exporters are by far the most satisfied with the rate of interest charged relative to other zones (4.E25). Only 73.5 per cent of all the exporters are satisfied with the rate of interest charged. However, more than 75 per cent of the large exporters are satisfied with this (4.E26). Less than 75 per cent of the diamonds, gems and jewellery exporters are satisfied with adequacy of amount sanctioned. Less than 75 per cent of the exporters of textiles, leather products, chemicals, handicrafts and agro-products are satisfied with the rate of interest charged. Less than 75 per cent of the exporters of leather products, chemicals and handicrafts are satisfied with margin stipulated. Only 63 per cent of the textiles exporters are satisfied with documentation need (4.E27). As far as the exporter-banker relationship is concerned, less than 75 per cent exporters are satisfied with interest rate charged by nationalised and private banks with more than three-fourths of the exporters being satisfied with the rate if interest charged by the SBI and foreign banks (4.E28, Chart 4.17).

6. The controversial link between collateral security and provision of export credit presents interesting observations. Nearly one-third of all exporters feel that linking export credit provision to collateral security is a major problem. However, a majority of about three-fifths of exporters does not feel thus. About 5 per cent did not respond to this question. However, a larger proportion of exporters in north and east finds this to be a problem as compared with exporters of west and south (4.E29). Relatively more of the small exporters do not find such relationship to be a problem as compared with other size groups (4.E30). Relatively more of the exporters of textiles, chemicals, agro- and engineering products do not find such relationship to be a problem as compared with others (4.E31). Relatively more exporters attached with nationalised banks face this linkage as a problem as compared with others (4.E32, Chart 4.18).

7. While asked about alternatives to collateral security, exporters came out with various suggestions. Confirmed orders / LCs turned out as the most common suggestion from exporters in west. ECGC cover is the major suggestion from exporters in east. Financial position of the company, past track record, personal guarantees by directors / partners and closer monitoring of the hypothecated stocks are preferred suggestions from exporters north. Buyer’s and export country’s credibility is a major suggestion from exporters in south (4.E33). Among all the suggestions received, 23 per cent favoured alternative to collateral security as ECGC cover; 20 per cent as confirmed orders / LCs; 17 per cent as financial position of the company; 16 per cent as past track record; and about 13 per cent as personal guarantees by directors / partners. Only 6 per cent of all the alternative suggestions favoured closer monitoring of hypothecated stocks and 5 per cent favoured buyer’s and export country’s credibility (4.E34). A total of 505 suggestions have been received.
8. Opinion seems to be divided regarding exporters’ perception on the degree of helpfulness of facility to interchange between pre- and post-shipment credit limits. While 65 per cent of all exporters feel that it is helpful another 23 per cent feel otherwise. About 12 per cent exporters have not responded. Relatively high proportion of exporters in north, as compared with south, perceives such interchange helpful (4.E35). Relatively high proportion of large exporters, as compared with small, perceives such interchange helpful as compared with that small (4.E36). Relatively high proportions of exporters of readymade garments; textiles; diamonds, gems and jewellery; and handicrafts, as compared with others perceive such interchange helpful (4.E37). Relatively high proportion of exporters banking with foreign banks, as compared with those banking with other bank groups, perceive such interchange helpful (4.E38).

4.3.1.D Post Sanction Disbursal

1. Packing credit is the most common form of pre-shipment finance availed by exporters along with advances against cheque / draft received or / and receivables from the government (4.E39 to 4.E42)
2. Packing credit is mainly used for purchase of raw material, and processing and packaging of goods to be exported. This observation is common across regions, sizes, products and bank classification (4.E43 to 4.E46).
3. A large proportion (four-fifths or more) of exporters avail packing credit in the form of Indian rupees rather than in foreign currency. Less than 3 per cent of the exporters use packing credit in foreign currencies. Nearly 13 per cent have not responded (4.E47). Foreign currency packing credit is more common for exporters in east zone; medium and large exporters; chemical and handicraft exporters; and exporters attached with SBI and foreign bank branches (4.E48 to 4.E50).
4. More than 70 per cent of exporters have "no idea" about banks’ assistance for timely claim from ECGC. Relatively more ignorance exists in north and east; small and medium exporters; exporters of readymade garments, chemicals and "other" products; and exporters associated with SBI and foreign bank branches (4.E51 to 4.E54). Nearly the same hold true about adequate support from ECGC for timely claim for defaulting cases (4.E55 to 4.E58).
5. More than 87 per cent exporters report that banks adhere to timely disbursement of export credit. North zone turns out to be the most efficient with a figure of 92 per cent with east zone touching only 79 per cent mark (4.E59, Chart 4.19). Medium and large exporters have reported better timeliness in credit disbursal as compared to lower-medium exporters. Small exporters are just touching the average mark (4.E60, Chart 4.20). Exporters of readymade garments, leather products, handicrafts and "other" products have reported better time compliance by their respective bank branches (4.E61, Chart 4.21). Time compliance is better in the case of SBI and foreign bank branches than in nationalised and private bank branches (4.E62, Chart 4.22).

4.3.1.E Utilisation of Delegated Powers

1. From exporters’ responses to a question on difficulties faced by them in settling their claims with the banks only 98 valid complaints have been received. While 64 complaints deal with delays due to procedures / indifferent staff attitude, 18 relate to banks’ inability to utilise delegated powers. There are eight complaints relating to the lack of management information systems and computerisation, and lack of transparency in banks’ responses (4.E63). Most of the complaints in each of the four regions attribute delays due to procedures and indifferent staff attitude (4.E64).
2. Only 27 per cent of all the exporters get compensated for delay in crediting export proceeds after realisation. Whereas banks in the southern region are doing better by compensating 43 per cent of the responding exporters, the proportion is below one-fifth in east and west (4.E65, Chart 4.23). Relatively high proportion of medium and large exporters gets compensated as compared with small and lower-medium ones (4.E66, Chart 4.24). Across product groups, exporters of readymade garments, chemicals, agro and other products seem to be relatively well compensated than other product groups (4.E67, Chart 4.25). Interestingly, SBI and private banks have a better record of such compensation than nationalised banks and with foreign banks exhibiting the poorest record (4.E68, Chart 4.26).

4.3.1.F Impressions about Bank Services

1. It is interesting to note that three-fourths of all the exporters consider training and experience of their dealing banks’ branch staff regarding export credit matters as above average with more than half of all exporters granting them "good" and nearly one-fourth granting "excellent" to them. This leaves only about one-fourth of all the exporters who grant average and lower marks to their banks in this regard, i.e. "average", "poor" and "very poor". However, the proportion of "excellent" awards across regions varies with west recording relatively high proportion as compared with east. East also lacks in awarding "good" remarks only 41 per cent saying so compared with the national average of 51 per cent. More than 40 per cent of exporters in the eastern region have granted average and lower marks to their banks compared with the national average of less than 25 per cent. Clearly, there are problems in the eastern region (4.E69). Across size-groups, exporters in medium and lower-medium categories grant relatively high degree of excellence to their banks as compared with large and small size-groups (4.E70). Exporters of leather products and of diamonds, gems and jewellery have granted a very high degree of excellence to their bank branches when compared with that given by exporters of other categories (4.E71). Across bank groups, the highest proportion of "excellent" awards goes to private banks (28 per cent) followed by nationalised and foreign banks (25 per cent each) and tailed by SBI and associate banks (20 per cent). Less than one-fifth of the foreign bank branches are rated as "average and below" compared with above 25 per cent for nationalised and private banks but only 22 per cent for SBI and associates (4.E72).
2. Exporters’ impressions about bank branches organising exporters’ meet are not generally good. Only 8 per cent consider such effort by their banks as "excellent" and 27 per cent consider this as "good". Nearly three-fifths of all the exporters grant such effort average or lower grades. About 5 per cent of the exporters have "no idea" about any such effort (4.E74). Whereas about 36 per cent exporters have granted "good" and "excellent" remarks to such effort by their banks, the number is relatively high in the case of leather products, readymade garments and agro products. Exporters of diamonds, gems and jewellery, as compared to others, have reported relatively high degree of excellence (4.E75). The combined "good and excellent" score is relatively high for SBI and private banks (38 per cent) as compared with nationalised banks (34 per cent), with foreign banks getting the least score (30 per cent) (4.E76).
3. Nearly three-fifths of the exporters have granted "above average" marks regarding their impressions about bank branch attending to their credit related problems. About one-fourth consider it average while about one-eighth consider it below average. North gets relatively high marks among "excellent" scores while west scores over other three among "good" (4.E77). The smallest proportion (51 per cent) of "good" and "excellent" scores has been granted by small-exporter group (4.E78). Across product categories, readymade garments; leather products; and diamonds, gems and jewellery have relatively high "excellent" impression about this issue as compared with others while agro products; engineering products; and other products have relatively high "good" impression as compared with others (4.E79). Relatively high "excellent" has been granted by exporters associated with private banks while relatively high "good" score has been granted by those in alliance with foreign banks (4.E80).
4. More than two-thirds of all exporters carry "above average" impression about computerisation and SWIFT facility in their dealing bank branches. Less than one-tenth of the exporters have granted "poor" or "very poor" impression with regard to this issue. North gets relatively high proportion of "excellent" remark and south gets such high proportion in "good" remark (4.E81). As per size classification, all except small exporters have awarded about 30 per cent "excellent" remark with small exporters putting this at 20 per cent only. Large exporters have awarded relatively high "good" remark as compared with others (4.E82). Relatively high proportion of "excellent" remark has been given by exporters of leather products and of diamonds, gems and jewellery relative to others. "Good" remark has been relatively generously granted by exporters of chemicals, engineering products and those of "other products" (4.E83). Relatively high proportion of foreign banks have received "excellent" grade while relatively high proportion of SBI and associated have received "good" grade (4.E84).
5. One of the most important findings of this study has been that more than three-fourths of all exporters are satisfied with overall level of satisfaction with the bank services relating to export credit delivery. While 23 per cent of exporters have granted this as "excellent" another 54 per cent have graded the same as "good". The only exception is eastern region where these proportions are relatively low with only 12 per cent exporters awarding "excellent" and 48 per cent awarding "good" (4.E85). About 40 per cent of exporters in east have thus awarded "average and below" grades as compared with 23 per cent national average. Whereas relatively low proportion of small exporters has granted "excellent" grade, relatively high proportion of large exporters has awarded "good" grade (4.E86). While a relatively high proportion of exporters of readymade garments have granted "excellent" grade, it relatively high proportion of exporters of textiles who have awarded "good" grade (4.E87). There does not seem to be much difference in exporters satisfaction across bank groups except some edge in the proportion of private banks getting "excellent" and in that of SBI and foreign bank groups in achieving "good" grade (4.E88).

4.3.1.G Suggestions

1. A total of 1377 suggestions have been received with regard to a) rules and procedures, b) costs, c) bank cooperation, d) bank modernisation, and e) government facilities. Most of these suggestions (above four-fifths) relate to the first two, i.e. rules and procedures, and costs. Out of the total of 1377, 55 per cent suggestions are on improving / simplifying rules and procedures, 28 per cent on reducing various types of costs, 10 per cent on better bank cooperation, 5 on bank modernisation, and only 2 per cent on asking for better government facilities. While the maximum suggestions (35 per cent) have been received from west, the figure is 30 per cent from north, 22 per cent from south and about 13 per cent from east (4.E89).
2. Out of a total number of 759 suggestions related to rules and procedures, about one-third express desire to simplify rules and regulations whereas 23 per cent of these intend quicker decision making by the bank branches. About 14 per cent suggestions ask banks to adhere to the RBI guidelines, 11 per cent favour greater flexibility in bank branches’ day-to-day working and 10 per cent suggest using alternatives to collateral security. Nearly 5 per cent of the suggestions intend lower margins against firm orders / LCs and 4 per cent opine that the post-shipment credit procedure needs simplification. Whereas west puts relatively high proportional emphasis on simplification of rules, east puts it on quick decision making, north on banks adhering to the RBI guidelines, and south on simplification of post-shipment credit procedure (4.E90).
3. A total number of 385 suggestions have been received for reducing various costs related to export credit. Nearly 70 per cent of these ask for lower interest charges and only 22 per cent demand lower "other charges". Only 4 per cent of all the suggestions have asked for lower ECGC insurance premium and another 4 per cent for lower charges on FOREX transactions. Whereas west puts relatively high emphasis on lower interest charges, east puts it on lower "other charges" (4.E91).
4. Of the total number of 133 suggestions received with regard to better cooperation by the bank branches, nearly 35 per cent ask for provision of timely information on changes in domestic rules and regulations, 33 per cent desire better information on prospective markets and buyers, 17 per cent request bank branches to facilitate timely receipt of duty drawbacks by exporters, 10 per cent request for friendly and promotional treatment to small and new exporters, and another 5 per cent desire for increased time of FOREX operations department. As compared with other regions, east emphasises more upon timely information on changes in domestic rules and regulations. West puts relatively high emphasis for better information on prospective markets and buyers (4.E92).
5. Nearly half of the 73 suggestions received asking for bank modernisation demand trained and efficient staff in FOREX departments of bank branches whereas another 40 per cent desire efficient management information system. Only one-tenth of 73 suggestions favoured online disbursement of credit. North has emphasised relatively more on trained and efficient staff in FOREX departments, east on efficient management information system, and west on online disbursement of credit (4.E93).
6. As low as 27 suggestions have been received asking for better government facilities with 82 per cent wanting extra facilities for export promotion and the remaining 18 per cent desiring less time for getting duty drawback. Whereas east and west have given 100 per cent emphasis on government providing extra facilities for export promotion, north’s emphasis is relatively high on less time for getting duty drawback (4.E94).

4.3.2 Exporters’ Satisfaction Index: Derived

Exporters’ satisfaction with export credit delivery system has already been discussed in part (5) of sub-section 4.3.1.F based Tables 4.E85 to 4.E88. This analysis was based on a single question (42) of the exporter’s questionnaire. We would like to check exporters’ response to question (42) through deriving an alternative form of exporters’ satisfaction index (ESA) based on their answers to five important and related questions asked in the exporters’ questionnaire. The following five key questions along with respective marks have been chosen:

1. Are you satisfied with the method of assessing your credit requirements (one mark if "yes" and zero mark if "no")?
2. How do you rate the bankers’ services with respect to sanctioning of the credit (average value of rating on scale 1 to 5)?
3. Was the disbursement of credit timely (one mark if "yes" and zero mark if "no")?
4. Ranking of bank services on a scale of 1 to 5 (average value of the rating on scale 1 to 5).
5. Overall ranking of banks by exporters on export credit delivery (average value of the rating on scale 1 to 5).

The marking of questions where rating varies from 1 to 5 has been normalised to a scale of 0 to 1. Marks for a particular question have been computed as the ratio of its deviation from minimum marks allotted to an exporter to the range of marks (difference between maximum and minimum marks). Hence, marks allotted to an exporter with minimum value will be zero and with maximum will be 1. Marks allotted to all five questions are added up to derive exporters satisfaction index (ESA). Value of this index can vary from 0 to 5. A comparison of "expressed" and "derived" ESA is presented in Table 3 showing the two distributions. Details of the derived ESA with reference to region, size, bank association and product category are provided in Tables 4 to 7.

Table 3: Derived and Expressed Exporters’ Satisfaction Index

Gradation of ESI	Distribution of Derived ESI	Distribution of Expressed ESI
Poor	7.1	2.7
Average	19.3	20.1
Good	55.2	54.3
Excellent	18.4	22.9
Total	100.0	100.0

Table 4: Region-wise Percentage Distribution of Exporters by Exporters’ Satisfaction Index (Derived)

Region	Poor	Average	Good	Excellent	All
Northern	5.4	20.7	51.5	22.4	100
Eastern	19.3	21.3	47.0	12.4	100
Western	5.3	18.3	56.2	20.2	100
Southern	5.9	18.6	59.9	15.6	100
All India	7.1	19.3	55.2	18.4	100

Table 5: Size-wise Percentage Distribution of Exporters by Exporters’ Satisfaction Index (Derived)

Size	Poor	Average	Good	Excellent	All
Small	9.8	17.5	58.1	14.5	100
Lower Medium	8.5	20.6	51.6	19.3	100
Medium	4.9	17.5	57.0	20.6	100
Large	4.2	19.3	59.8	16.6	100
All India	7.1	19.3	55.2	18.4	100

Table 6: Bank-wise Percentage Distribution of Exporters by Exporters’ Satisfaction Index (Derived)

Bank Type	Poor	Average	Good	Excellent	All
SBI and Associate Banks	5.4	16.7	61.9	16.0	100
Nationalised Banks	8.6	20.6	51.7	19.1	100
Private Banks	4.1	19.9	56.1	19.9	100
Foreign Banks	4.1	14.3	61.2	20.4	100
Total	7.1	19.3	55.2	18.4	100

Table 7: Product-wise Percentage Distribution of Exporters by Exporters’ Satisfaction Index (Derived)

Products	Poor	Average	Good	Excellent	All
Readymade Garments	6.7	17.4	55.1	20.9	100
Textiles	8.5	18.2	64.5	8.9	100
Leather Products	6.5	27.1	43.9	22.4	100
Diamonds Gems & Jewellery	3.9	23.5	52.0	20.6	100
Chemicals	4.6	20.2	60.6	14.7	100
Handicrafts	5.0	20.4	52.5	22.1	100
Agro-Products	10.4	21.2	50.3	18.1	100
Engineering Products	9.0	17.0	55.6	18.4	100
Others	6.5	16.1	55.5	21.9	100
Total	7.1	19.3	55.2	18.4	100

Table 8: Ratio of Expressed ESI to Derived ESI

	Poor	Average	Good	Excellent	Average
Region
Northern	0.77	0.87	1.00	1.18
Eastern	0.23	1.67	1.01	1.00
Western	0.27	1.08	0.98	1.16
Southern	0.39	0.86	0.97	1.52
Average	0.42	1.12	0.99	1.21	0.94
Size
Small	0.52	1.22	0.98	1.15
Lower Medium	0.28	1.03	0.99	1.32
Medium	0.57	0.99	0.98	1.16
Large	0.35	1.03	0.98	1.22
Average	0.43	1.07	0.98	1.21	0.92
Bank Type
SBI and Associate Banks	0.31	1.04	0.97	1.32
Nationalised Banks	0.37	1.04	1.00	1.23
Private Banks	0.66	0.98	0.96	1.21
Foreign Banks	0.00	1.43	0.97	1.00
Average	0.34	1.12	0.97	1.19	0.91
Products
Readymade Garments	0.36	1.19	0.88	1.36
Textiles	0.22	0.98	1.02	1.61
Leather Products	0.72	0.79	1.13	1.08
Diamonds Gems & Jewellery	0.26	0.88	1.00	1.29
Chemicals	0.20	0.64	0.99	1.76
Handicrafts	0.58	1.08	0.99	1.04
Agro-Products	0.41	1.08	0.98	1.29
Engineering Products	0.36	1.30	1.04	0.91
Others	0.40	1.04	0.96	1.24
Average	0.39	1.00	1.00	1.29	0.92

3. Econometric Analysis of Exporters’ Level of Satisfaction

We have undertaken a simple econometric exercise to check whether region, product category, size and associated bank group, as qualitative explanatory factors, have some influence on level of satisfaction of exporters. Ordinary least square has been used with log of the level of satisfaction (as expressed by exporters in response to question 42) being the dependent variable. The independent variables are zero-one dummy variables. Such models are known as analysis-of-variance (ANOVA) models

Log (satisfaction) = f (region, size, product, bank group)

Estimation of OLS, however, requires that one of the components of each of the qualitative dummy variables should not be included as an independent variable so as to avoid the problem of singularity. We shall need to exclude one of the four regions, one of the four size groups, one of the nine product categories and one of the bank groups. Excluded variables include eastern region, engineering-products category, small exporters and nationalised banks. The excluded components have been selected in a way that we get all positive estimated coefficients on the right hand side. This has been done through excluding various combinations of the four excluded components. Alternatively, it may be concluded from our estimate given in Table 9 that probability of a "small" exporter of "engineering-products" operating in the "eastern region" and dealing with a "nationalised" bank branch is likely to be among the least satisfied category. Another interpretation of Table 9 is that a "medium" size exporter in the "southern region" exporting one of the "other products" and dealing with a "private" Indian bank is likely to be among the most satisfied category.

Table 9 should, however, be read with caution since it only provides certain broad hints and not all estimated coefficients are statistically significant.

Table 9: Regression Results of Level of Satisfaction

(Dependent variable: Log of Level of Satisfaction; Independent binary dummy variables: region, product category, size and associated bank-group)

Variable	Coefficient	Std. Error	t-Statistic	Prob.
Constant	0.3711	0.095	3.90	0.0001
North	0.3288	0.078	4.24	0.0000
West	0.3480	0.074	4.73	0.0000
South	0.3599	0.071	5.05	0.0000
Readymade Garments	0.1309	0.071	1.83	0.0673
Textiles	0.0324	0.078	0.41	0.6784
Leather	0.1313	0.100	1.31	0.1892
Diamonds, Gems & Jewellery	0.1180	0.103	1.14	0.2539
Chemicals	0.1938	0.099	1.95	0.0512
Handicrafts	0.0308	0.078	0.39	0.6939
Agro-Products	0.0580	0.084	0.69	0.4921
Other Products	0.2149	0.088	2.44	0.0149
Lower Medium Exporters	0.1688	0.062	2.71	0.0068
Medium Exporters	0.1944	0.070	2.78	0.0055
Large Exporters	0.1365	0.073	1.87	0.0614
SBI and Associate Banks	0.0421	0.047	0.90	0.3685
Private (inc. Co-Op) Banks	0.0813	0.123	0.66	0.5075
Foreign Banks	0.0162	0.062	0.26	0.7949
R-squared = 0.0304 Adjusted R-square= 0.0209 F-statistic = 3.204 Prob (F- statistic) = 0.0000

Note: Dropped Variables are East, Engineering Products, Small Exporters and Nationalised Banks

4.3.4 Bias in Exporters’ Responses

In order to check whether there is any systematic bias in responses of the exporters depending upon whether they were contacted through taking their addresses from their concerned bank branch or, alternatively, they were contacted through some other source. This may happen because of two reasons, viz. a) bank branch might provide addresses only of the satisfied exporters; or / and b) bank branch may overstate its level of satisfaction lest its banker should stop providing various facilities in case the exporter being surveyed registers criticism of its banker. The results are provided in Tables 10 to 17. It may be observed from these results that exporters have been consistently been liberal in awarding "excellent" grade to their associated main bank branch in case their addresses had been provided by their respective bank branches. The percentage of such bias as high as 35 per cent at all India-level. It is relatively in the case of west (53 per cent) and low in the case of north (16 per cent). Across size categories, the medium exporters tend to provide relatively high overestimate (47 per cent) as compared with large exporters (16 per cent). Across associated banks, a high bias of 79 per cent is observed in the case of private bank compared to a negative bias (-38 per cent) in the case of foreign banks. This implies that the foreign bank-address-provided exporters have awarded relatively few "excellent" grades as compared to those banking with foreign banks but whose addresses have been procured from other than their bank sources. In the case of product categories, relatively high bias is observed in the case of exporters of diamonds, gems and jewellery (136 per cent) as compared to exporters of chemicals (31 per cent).

Table 10: Regionwise Percentage Distribution of Exporters by Overall Satisfaction from Bank and other than Bank Sources

Region	Exporters Source	Poor	Average and Good	Excellent	Total
North	From Bank	5.3	66.3	28.4	100.0
	Other Sources	3.0	72.6	24.4	100.0
East	From Bank	7.9	76.2	15.9	100.0
	Other Sources	2.9	86.3	10.8	100.0
West	From Bank	2.1	68.1	29.8	100.0
	Other Sources	1.0	79.4	19.5	100.0
South	From Bank	0.0	69.2	30.8	100.0
	Other Sources	2.5	74.5	22.9	100.0
All India	From Bank	3.7	68.4	27.8	100.0
	Other Sources	2.2	77.2	20.7	100.0

Table 11: Regionwise Bias in Overall Satisfaction of Exporters from Bank and other than Bank Sources

Region	Poor	Average and Good	Excellent
North	73.6	-8.6	16.4
East	175.8	-11.7	47.1
West	104.3	-14.3	52.7
South	-100.0	-7.1	34.2
All India	72.2	-11.3	34.6

Note: There is no Exporter in Bank list Southern Region giving Poor Rating

Table 12: Sizewise Percentage Distribution of Exporters by Overall Satisfaction from Bank and other than Bank Sources

Size	Exporters Source	Poor	Average and Good	Excellent	Total
Small	From Bank	5.1	74.6	20.3	100.0
	Other Sources	5.1	79.4	15.4	100.0
Lower Medium	From Bank	4.0	64.9	31.1	100.0
	Other Sources	1.6	75.6	22.8	100.0
Medium	From Bank	4.0	65.3	30.6	100.0
	Other Sources	2.3	76.9	20.8	100.0
Large	From Bank	2.4	75.6	22.0	100.0
	Other Sources	1.0	80.0	19.0	100.0
All Sizes	From Bank	3.7	68.4	27.8	100.0
	Other Sources	2.2	77.2	20.7	100.0

Table 13: Sizewise Bias in Overall Satisfaction of Exporters from Bank and other than Bank Sources

Size	Poor	Average and Good	Excellent
Small	-1.1	-6.1	31.8
Lower Medium	146.6	-14.1	36.3
Medium	77.4	-15.0	47.1
Large	136.2	-5.5	16.0
All Sizes	72.2	-11.3	34.6

Table 14: Bankwise Percentage Distribution of Exporters by Overall Satisfaction from Bank and other than Bank Sources

Bank Type	Exporters Source	Poor	Average and Good	Excellent	Total
SBI and Associate Banks	From Bank	2.4	74.8	22.8	100.0
	Other Sources	1.5	78.1	20.4	100.0
Nationalised Banks	From Bank	4.2	66.8	29.0	100.0
	Other Sources	2.7	76.5	20.8	100.0
Private Banks	From Bank	5.1	59.3	35.6	100.0
	Other Sources	1.9	78.3	19.9	100.0
Foreign Banks	From Bank	0.0	85.0	15.0	100.0
	Other Sources	0.0	75.9	24.1	100.0
All India	From Bank	3.7	68.4	27.8	100.0
	Other Sources	2.2	77.2	20.7	100.0

Table 15: Bankwise Bias in Overall Satisfaction of Exporters from Bank and other than Bank Sources

Bank Type	Poor	Average and Good	Excellent
SBI and Associate Banks	57.3	-4.2	11.8
Nationalised Banks	58.0	-12.8	39.5
Private Banks	172.9	-24.2	79.1
Foreign Banks	N.A.	12.0	-37.9
All India	72.2	-11.3	34.6

Note: There are no Exporters from Bank as well and other sources giving Poor Rating.

Table 16: Productwise Percentage Distribution of Exporters by Overall Satisfaction from Bank and other than Bank Sources

Products	Exporters Source	Poor	Average and Good	Excellent	Total
Readymade Garments	From Bank	2.5	63.6	33.9	100.0
	Other Sources	2.4	71.8	25.9	100.0
Textiles	From Bank	1.4	80.8	17.8	100.0
	Other Sources	2.2	84.9	12.9	100.0
Leather Products	From Bank	6.6	63.9	29.5	100.0
	Other Sources	2.2	80.4	17.4	100.0
Diamonds, Gems & Jewellery	From Bank	0.0	56.3	43.8	100.0
	Other Sources	1.4	80.0	18.6	100.0
Chemicals	From Bank	0.0	79.2	20.8	100.0
	Other Sources	1.7	68.3	30.0	100.0
Handicrafts	From Bank	6.4	64.9	28.7	100.0
	Other Sources	0.7	80.1	19.2	100.0
Agro-products	From Bank	2.4	70.7	26.8	100.0
	Other Sources	4.6	72.8	22.5	100.0
Engineering Products	From Bank	6.1	71.2	22.7	100.0
	Other Sources	1.9	83.9	14.2	100.0
Other Products	From Bank	7.1	64.3	28.6	100.0
	Other Sources	1.6	71.7	26.8	100.0
All Products	From Bank	3.7	68.4	27.8	100.0
	Other Sources	2.2	77.2	20.7	100.0

Table 17: Productwise Bias in Overall Satisfaction of Exporters from Bank and other than Bank Sources

Products	Poor	Average and Good	Excellent
Readymade Garments	8.1	-11.4	31.0
Textiles	-36.3	-4.9	38.0
Leather Products	201.6	-20.5	69.7
Diamonds, Gems & Jewellery	-100.0	-29.7	135.6
Chemicals	-100.0	15.9	-30.6
Handicrafts	831.9	-19.0	49.8
Agro-products	-47.4	-2.9	19.2
Engineering Products	213.1	-15.1	60.1
Other Products	353.6	-10.3	6.7
All Products	72.2	-11.3	34.6

Note: There are no Exporters from Bank corresponding to Diamonds, Gems and Jewellery, and Chemicals giving Poor Rating.

4.2.5 Suggestions ‘At a Glance’ to Improve the Export Credit Delivery System

(Compiled from those exporters who ranked ‘very poor’ and ‘poor’ to their present bankers in response to Question 42)

Attention Areas

1. Avoid Collateral Security
2. Reduce interest rates on export credit
3. Reduce documentation
4. Provide competent staff to handle export credit as lack of coordination among bank authorities prevails
5. Banks should follow RBI guidelines not their management code
6. More powers should be delegated to bank branches so that bank branches should act and behave like business centres
7. Avoid insistence on ECGC cover
8. Adequate or need based credit should be available
9. Reduce margin stipulated and bank processing charges

Suggestions to Improve the Export Credit Delivery System

(Compiled from those exporters who rated their present bankers’ — ‘Poor’)

Bank Group	Region	Product	Suggestions
SBI and Associates	South	Textiles	Reduction in rate of interest would be a great help to exporter.
SBI and Associates	South	Textile Machinery	Collateral security should be avoided. Export credit should be on past performance.
SBI and Associates	East	Jute Products	Bank should look after the potential smaller party and cater to their needs by giving good services.
SBI and Associates	North	Cycles	Paper work involved in availing limits should be reduced. Staff should be competent in handling the export business. Bank should not charge different rates of interest, processing charges and courier charges. Banks should follow RBI codes rather than their management codes.
SBI and Associates	North	Engineering Products	There should not be too much insistence on stock statements on purchase order in hand and other documents, which they never read. Even after giving huge collateral security and ECGC cover, if the exporter does not get money in time it will be better take loan from open market.
SBI and Associates	West	Readymade Garments	No suggestions
SBI and Associates	South	Silk	There should be transparency in bank transactions. Credit delivery system should not be very lengthy.
SBI and Associates	North	Readymade Garments	Rigidity about guidelines should not be there. Bank officials should use discretionary powers and avoid unnecessary paper work
SBI and Associates	North	Readymade Garments	There should be co-ordination among different bank departments. Packing credit should be given on confirmed LC. Banks should not insist for Collateral security Banks should give liberal and timely export credit.
Nationalised Banks	West	Textiles	Interest rate on Export Credit should be reduced. There is no need of ECGC policy. Documentation should be less. Bank should work more efficiently while dealing with export credit system.

Bank Group	Region	Product	Suggestions
Nationalised Banks	North	Rice	Basis of sanctioning credit limit should not be based on the past performance of the party. Rather, it should be based on the factors like prospects of export, credibility of the party and capacity to export. Rate of interest should be lowered. Banks should come forward to help the business and help in overcoming the difficulties instead of shying away and making it difficult to borrow. RBI should see that the exporters should not suffer.
Nationalised Banks	South	Textiles	Banks should encourage the exporters.
Nationalised Banks	South	Readymade Garments	Bank has to be responsive to any guideline form RBI like interest rate reduction. The 26th September 2001 guidelines have been in effect only from 5th December 2001 even though it is on retrospective effect.
Nationalised Banks	North	Readymade Garments	Processing of loan applications should be timely. More powers should be delegated to branches. Banks should act and behave like business centres. Their attitudes have to be changed. They think they are doing favours to customers while extending limits to them.
Nationalised Banks	North	Diamonds, Gems & Jewellery	There should be just one paper for renewal. There should be one window system. Health code should not be revised when it is not used.
Nationalised Banks	West	Handicrafts	ECGC should not be compulsory. Premium of ECGC should be lowered. There should not be interest on the premium. Delay in dialogue between RBI and bank causes delay in settlements. Therefore banks should be given the liberty to make decisions.
Nationalised Banks	North	Sports Goods	Rate of interest should go down. Branch staff should be experienced enough to handle export related matters and be productive.
Nationalised Banks	North	Leather Products	Bank should take less time in getting approval so that exporter does not loose time and also the bank should be more liberal in knowing about the buyer Bank should not press for ECGC cover, instead bank itself should give export cover.
Nationalised Banks	North	Leather Products	Bank staff should be trained to deal with export proceeds. Government should allow sending documents directly by exporters to overseas buyers.
Nationalised Banks	South	Coir Products	No suggestions

Bank Group	Region	Product	Suggestions
Nationalised Banks	South	Coir Products	Banks should also increase the credit limit whenever they ask for increase in collateral security and ECGC cover. Bank charges should be uniform — our banker always charge more in comparison to State Bank of Bikaner and Jaipur & State Bank of India bank in respect of PCL.
Nationalised Banks	East	Engineering Products	Attitudes of the bank staff towards their clients need to be changed.
Nationalised Banks	East	Engineering Products	Credit sanctioning should be speedy. They do not want to enhance our limits, as chief manager wants to play safe. They are insisting for further collateral for enhancement. At present our fund-based limits are Rs. 310 Lakhs and against that they have Rs. 119 Lakhs worth of Property Rs.16 Lakhs worth of FDR. This amounts to cover 45% of collateral. Banks discourage us to operate EFC account and always put obstacles. Their contention is that they loose currency spread. EFC accounts operations are delayed extraordinarily as they are routed through their head office. And amount charged on each EFC transactions should be reduced. They always want to put obstacles whenever a new issue comes up, they are just worried about protecting their skins. Least bothered about hardships to exporters or loss to the country. They take too long to issue Bank Certificate. Delay in dispatching documents to foreign buyer or bank is very slow. We applied for a set O/F to RBI through our bank, but our bank officers were non co-operative and delayed the matter by over three months and harsh us in all possible ways even after RBI approval. Behaviour of bank staff should be improved. Our buyer wanted to have ESCROW account but our banker did not allow the same on flimsy grounds. We do not get good exchange rates.
Nationalised Banks	East	Jute Products	Credit should be released immediately and credit limit should be increased for non-defaulting cases.
Nationalised Banks	East	Leather Products	Credit limit should be sanctioned within 30 days from the submission of data. Amount of Collateral security should be reduced. Whenever we negotiate big deals we are not properly funded by banks or else we are not allowed to avail ad-hoc limit on a regular bases.
Bank Group	Region	Product	Suggestions
Nationalised Banks	East	Leather Products	Limit should be based on grievance volume.
Nationalised Banks	East	Leather Products	Collateral security is a major problem. Sanctioning and disbursement process must be fast. Timely credit should be available.
Nationalised Banks	East	Textiles	Banks should have friendly attitude towards small exporters and should encourage them.
Nationalised Banks	North	Engineering Products	Bank should ensure timeliness (most important in export sector)
Nationalised Banks	West	Hosiery	Packing credit limit should be provided to each and every exporter on annual credit basis (125 % of the previous year export transactions).
Nationalised Banks	West	Hosiery	Packing credit limit should be provided on annual basis.
Nationalised Banks	North	Readymade Garments	Quality of staff and the services provided by them should be improved
Nationalised Banks	North	Readymade Garments	Interest rate should be lowered. PCL should be more simplified.
Nationalised Banks	North	Electronics	No Suggestions
Nationalised Banks	North	Handlooms	Bank should enhance the credit limit without collateral security.
Nationalised Banks	North	Handlooms	No comments
Nationalised Banks	West	Engineering Products	Bank staff should be trained and educated about the difference in export credit and normal term loan. All banks should understand that export credit especially to merchant exporter is need based and immediate sanction is essential. All preferences should not be on paper; banks should immediately sanction credit against LC. Collateral security should not be there
Nationalised Banks	South	Spices	Bank staffs are irresponsible; they should be more efficient.
Nationalised Banks	South	Coffee	Banks should provide timely help in export credit related matters. All commercial banks should follow and implement RBI guidelines.
Nationalised Banks	South	Readymade Garments	Sanction and disbursement of credit should be timely. Margin should be reduced. Adequate credit should be made available.
Nationalised Banks	South	Readymade Garments	Credit limit should be sanctioned against the LC.

Bank Group	Region	Product	Suggestions
Private Banks	West	Dyes & Chemicals	Interest rate on Export Credit should be reduced. Bank charges should be subsidised. Commercial skills of the bank staff need improvement. More qualified staff should be employed in export credit department.
Private Banks	North	Carpets	No suggestions
Private Banks	South	Seafood	Bank should fully support the exporters. Bank must sanction the credit limit as per requirement of the exports. Banks branches should be given more autonomy and delegated powers should be implemented more efficiently. Credit disbursement should be at least equal to the amount of collateral security. The Bank should extend credit in any new scheme for payment to the fish processing labourers, particularly to small exporters. This will help in financing and extending the volumes of fish exports.
Private Banks	East	Jute Products	Processing charges should be brought reduced. Collateral security should not be made compulsory. PLR of our some private banks is very high compare to Nationalised bank
Private Banks	West	Hosiery	No suggestions
Private Banks	West	Textiles	Collateral security should be done away with. Sanctions should be directly related to the progress in performance.

Chapter 5 - Interpretation of the Survey Results

5.1 Scope of the Study

The present survey is an attempt to analyse the existing export-credit delivery system in India. The focus has been on short-term working capital credit requirements of the Indian exporters, which are mainly taken care of by the scheduled commercial banks. These banks provide exporters with financial and other services. While the financial services include provision of export finance, other services include handling of export documents, counselling and advisory services, facilitating foreign exchange operations of exporters, etc. The foreign exchange operations of the banks are guided by the RBI and FEDAI regulations.

Around the world, exporters enjoy various types of subsidies from their respective governments. Certain subsidies may provide excessive protection to domestic industries and act as barriers to free trade. As detailed out in Chapter 2, WTO Agreement on Subsidies and Countervailing Measures (SCM) addresses the implementation issues relating to subsidies in general. Subsidies based on export performance fall under the "prohibited" category. Various developing countries, including India, get "special and differential treatment" and can maintain such subsidies subject to the fulfilment of certain conditions. However, importing countries are permitted to countervail the use of prohibited subsidies provided under the special and differential treatment only if these cause adverse effects to importing countries’ interests. Studies need to be undertaken on a continued basis to update the evaluation of potential risks of countervailing measures as well as identify Harmonised System trade sectors that are likely to be affected now or in the future.

Keeping in view the objectives of this study, a cluster approach has been chosen to collect information from bankers and exporters. Thirty-two export products/ categories were identified for the study clustered in twenty-nine cities/towns. A selected export product/category may be produced in one or more cities/towns and a city/town may be having cluster(s) of one or more export products / categories. A total of 57 export production clusters have thus been chosen for this study. It was decided that the survey would include 300 bank branches 1680 exporters.

Getting the requisite information from 300 bank branches and 1680 exporters from all over the country is a challenging task. Separate Questionnaires were designed for bankers’ and exporters’ responses, respectively. A schedule-structured personal interview approach was chosen to collect primary data. This is a less flexible approach of personal interviews since the number and wording of questions remain identical for all the respondents. However, its merit lies in the fact that the interviewer is not permitted to rephrase a question and hence interpretation and reporting bias of interviewers’ is minimised. Even the sequence in which the questions are asked remains the same in every interview. The variations between responses can thus be fairly attributed to the actual differences of opinion between the respondents and not to variations in the interview itself.

The present study provides a detailed discussion of the results based on responses of surveyed bank branches and exporters. Various aspects relating to bankers’ adherence to the prescribed guidelines and exporters’ satisfaction with the export credit delivery system in India was detailed out. The important result is that majority of the banks claim to be adhering to the RBI and FEDAI norms and a majority of the exporters are generally satisfied with the existing credit delivery system. In the following sections, we would make an attempt towards interpreting salient features emerging from the detailed discussion presented in Chapter 4.

5.2 Spread of Banks in the Sample

An effort has been made to include an assorted sample of bank branches across 28 major Indian towns / cities. Representation has been given to all nine banks of Group 1 (SBI and associates), 19 banks from Group 2 (nationalised banks), 28 banks from Group 3 (private Indian banks) and 21 banks from Group 4 (foreign banks).

Among the bank branches surveyed, more than half turn out to be from Group 2, one-fifth for each of Groups 1 and 3, and less than 8 per cent from Group 4. West constitute about 35 per cent of the bank branches sample, north 30 per cent, south 25 per cent, and east only 10 per cent.

The nationalised bank branches (Group 2) dominate across each of the four regions with north having nearly three-fifths of its total fleet of surveyed bank branches from Group 2, with east and west each having nearly half of their total surveyed branches falling in this Group. The nationalised bank branches constitute only 45 per cent of all the branches surveyed in south.

While SBI and associate bank branches (Group 1) constitute the second most important group in numbers, after nationalised bank branches, across north and east with each containing nearly one-fourth of its surveyed branches falling under this Group. Interestingly, private Indian bank branches (Group 3) constitute the second most important group across west and south (24 and 29 per cent, respectively).

5.3 Spread of Major Export Clusters in the Sample

In this section, we provide a broad outline of the 57 export clusters that spread over 29 Indian towns / cities chosen. The selected export clusters encompassed broad categories of export product. Among the three major export categories of India, viz. textiles, readymade garments, and diamonds, gems and jewellery, north has a major cluster of exporters of readymade garments in and around Delhi. East has a major cluster of textile exporters in and around Kolkata. West has various important export clusters with textile exporters in Ahmedabad, Mumbai and Surat, readymade garments in Mumbai, diamonds, and gems and jewellery in Jaipur, Mumbai and Surat. South has significant export clusters of textiles in Chennai and readymade garments in Bangalore.

Handicraft export clusters are spread over Bhadoi, Moradabad, Ludhiana and Panipat in north, Jaipur in west, and Chennai, Mysore and Tripur in south.

Clusters of exporters of engineering products are spread over Faridabad, Gurgaon, Ludhiana and NOIDA in north, Kolkata in east, Mumbai, Pune and Surat in west, and Coimbatore, Bangalore and Guntur in south.

Exporters of agro-products are clustered around Amritsar in north, Kolkata in east, Indore in west, and Bangalore, Guntur and Kochi in south.

Clusters of exporters of chemicals have been included from Ahmedabad and Pune in west and Hyderabad in south.

Leather products are mainly exported from Agra and Kanpur in north, Kolkata in east and Chennai in south.

"Other products" group including aluminium, cycles, granite, iron ore, sea food, silk and sports goods have export clusters in around Jalandhar and Ludhiana in north, Bhbaneswar in east, Jaipur in west, and Kochi, Mangalore and Mysore in south.

5.4 Bankers’ Export Credit Operations

Commercial banks provide export finance at a rate lower than their prime lending- rate. With progressive deregulation of interest rates, banks now have considerable flexibility to decide their deposit and lending rate structures and manage their assets and liabilities more efficiently. On the lending side, banks are free to prescribe their own lending rates including the Prime Lending Rate (PLR). On the deposit side, banks have been given the freedom to offer a fixed rate or a floating rate subject to the approval of their Boards.

The rupee export credit interest rate structure was changed with effect from May 5, 2001 by providing ceiling rates linked to the short-term PLRs of the banks. This was expected to introduce healthy competition and provide exporters a greater choice to avail of banking services in terms of interest rate, quality of service and transaction costs. The RBI effected a reduction in ceiling rate on export credit by another 1 percentage point (i.e. up to 2.5 per cent less than short-term PLR) across the board on September 26, 2001, which would remain valid up to September 30, 2002.

The priority sector lending is an important function of India’s commercial banks’ operations. It includes lending to agriculture, small-scale industries (SSI), transport operators, etc. It is 40 per cent of net bank credit for all Indian banks. Export credit is over and above the priority sector and has a minimum norm of 12 per cent. The foreign banks operating in India have to allocate at least 32 per cent of their net bank credit (NBC) to priority sector and export finance with sub-sectoral targets of 10 per cent for SSI and 12 per cent for exports. The proportion of gross bank credit allocated to exports has witnessed significant changes during the last two decades. It increased from less than 6 per cent in the mid-1980s to over 12 per cent by the mid-1990s with a downward trend toward 10.5 per cent during the late 1990s. The share of export credit to total exports has been about 25 per cent during 1980-81 to 1999-2000. While it was about 24 per cent in the 1980s, it increased to about 26 per cent in the 1990s. There has been a general decline in this ratio from over 29 per cent during the late 1980s to less than 24 per cent during the late 1990s.

Banks have been found to be granting export credit for the working capital needs of a vast majority of exporters. Except for some apparent hesitation on the part of foreign banks, various bank groups cater to the needs of new exporters. Apart from certain important criteria regarding financial standing of the export unit asking for finance, nearly 84 per cent of all the bank branches have been found skirting the RBI suggestion with regard to "no insistence" on collateral security. Relatively more frequent occurrence of this situation across regions is bank branches in north while across bank groups nationalised and private bank branches have been observed behaving like this. Bank branches in east and foreign banks across the country are relatively conservative in catering to the needs of small exporters, i.e. with export turnover of less than Rs. 50 lakh. Nearly half the bank branches have reported no fixed target of achieving export credit disbursal during the year 2000-01.

A Bankers’ Adherence Index (BAI) to the RBI guidelines has been prepared using and integrating bits and pieces of information "self-revealed" by the bank branches. At the all-India level, about 8 per cent of bank branches fall under the poor category with regard to their adherence to the RBI’s guidelines for export credit delivery system. About 14 per cent of the bank branches get excellent grade. About 21 per cent of all the bank branches turn out as average and 57 per cent as good.

Analysing the excellent grade for different groups of banks, foreign banks stand apart with a distinction. About 29 per cent of all the foreign bank branches under survey qualify as excellent. In the case of SBI and associate branches as low as 6 per cent turn out as excellent. The nationalised and private bank branches are "revealed" mediocre performers with less than 15 per cent turning out as excellent.

5.5 Exporters’ Satisfaction with Export Credit Delivery System

Nationalised banks are leaders in providing export finance, followed by SBI and associates, private banks and foreign banks. Nearly one-sixth of exporters find pre-shipment sanction grant application form "difficult" and "very difficult". Relatively large proportion of small and lower-medium exporters find this form difficult. With regard to the bank group association, exporters associated with nationalised banks are relatively least satisfied and those associated with foreign-banks are most satisfied.

Nearly one-third of all exporters feel that linking export credit provision to collateral security is a major problem. A larger proportion of exporters in north and east finds this to be a problem as compared with exporters of west and south.

ECGC cover is the most preferred alternative to collateral security followed by confirmed orders / LCs, financial position of the company; past track record, personal guarantees by directors / partners.

Nearly two-third of the exporters feels that facility to interchange between pre- and post-shipment credit limits will help exporters.

One of the most important findings of this study has been that more than three-fourths of exporters are satisfied with overall level of satisfaction with the bank services relating to export credit delivery. Nearly one-fourth of exporters has perceived it as "excellent" and more than half as "good". The only exception is eastern region where only one-eight perceive it as "excellent" and less than half as "good".

On one hand relatively low proportion of small exporters has perceived bankers’ performance as "excellent", whereas relatively high proportion of large exporters perceives it as "good". While a relatively high proportion of exporters of readymade garments has perceived bankers’ performance as "excellent", relatively high proportion of exporters of textiles perceives it as "good".

5.6 Major Suggestions from the Study

It is not an easy task to extricate select suggestions from a study of this magnitude. Much depends on what aspect of exporters’ satisfaction with the export credit delivery system is of special interest under some specific context. This makes all analysis attempted in Chapter 4 and tables attached with it as important. However, we would provide some broad comments as suggestions that distinctly come out of the present survey based study.

1. Foreign banks need to be advised to entertain new exporters.
2. Alternatives to collateral security must be found and fully made use of.
3. Small exporters need to be encouraged by foreign banks and east zone.
4. Bank branches must have their export credit `targets’ compliant with the RBI guidelines.
5. Branches of domestic banks should be given higher export credit sanctioning powers, which is the practice followed by foreign banks.
6. Banks need to be instructed to accelerate processing of requests for credit limit beyond their sanctioning powers.
7. In the case of consortium finance, the banks must be instructed either to follow the assessment report prepared by the lead bank or in case they still insist on self-assessment the same should be done expeditiously.
8. Banks must be advised to continue with their normal credit sanctioning procedures, based on the client’s goodwill and track record, even during the years of sluggish export growth.
9. In the case of exporters with good track record, the bank branch should have no objection to interchange between the pre- and post-shipment credit limits. Private banks need to be specially advised in this regard.
10. Banks must compensate exporters for any delay in crediting realised amount due to them in their accounts.
11. Small and lower-medium size exporters need to be helped in filling up of pre-shipment application form. The same is true for exporters of leather products, chemicals, and diamonds, gems and jewellery.
12. Small exporters need to be educated properly about information and documents required along with the export-credit application form. The same is true of exporters of chemicals and exporters associated with nationalised and foreign banks.
13. While exporters are generally satisfied with the method of assessment for their credit requirements, more attention needs to be paid towards exporters of east zone, lower-medium size, leather products, and those operating with nationalised banks.
14. Linking credit sanction to collateral security is a problem. In this regard, special attention needs to be paid towards north and east zones, medium and lower-medium size exporters, and exporters of leather products, "other products", and diamonds, gems and jewellery. Nationalised banks need to be dissuaded from overusing this instrument. Confirmed orders/LCs, ECGC cover and past track record are some of the alternatives banks should consider as alternative to collateral security.
15. Exporters need to be educated about the taking banks’ assistance for timely claims from ECGC.
16. Exporters need to be apprised of seeking help from ECGC for getting adequate support for timely claim for defaulting cases.
17. Banks should organise exporters’ meet on a regular basis.
18. Banks need to improve upon the following aspects:

• Minimise delays due to procedures / indifferent staff attitude.
• Improve upon computerisation and management information systems.
• Introduce transparency in banks’ operations.
• Optimise use of their delegated powers.

19. Less satisfied exporters based on size, region, product category and association with bank group need to be paid more attention to their specific needs.
20. Some of the suggestions provided by 47 exporters who have granted "poor" and "very poor" to their level of satisfaction with export credit delivery system must be given a sympathetic hearing. Detailed comments on these suggestions are provided in sub-section 4.2.5.

References

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Arya, P.N. (1971): Survey of Export Credit Facilities in India, USAID, New Delhi.

Cizaukas, C. Albert (1980): "The Changing Nature of Export Credit Finance and Its Implications in Developing Countries", World Bank Staff Working Paper No. 409, Washington, D.C.

FEDAI (2000): Set of Books prepared for the Workshop Sponsored by the Reserve Bank of India, Mumbai.

Fitzgerald, Bruce and Terry Monson (1989): "Preferential Credit and Insurance and to Promote Exports, Research Observer, 4(1), January.

Fleisig, Heywood and Catharine Hill (1984): "The benefits and Costs of Official Export Credit Programs of Industrialized Countries: An Analysis", World Bank Staff Working paper 659, Washington, D.C.

Frankfort-Nachmias, Chava and David Nachmias (1996): Research Methods in Social Sciences, Arnold: St. Martin’s Press, London.

Fry, Richard (1979): "Competition in Export Credit Terms", The Banker, August.

Government of India: Annual Report (2000-2001), Ministry of Commerce and Industry, Department of Commerce, New Delhi.

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NABHI (2002): Exporters Manual and Documentation, New Delhi.

OECD (1998): The Export Credit Arrangement 1978-1998,Paris.

Panagariya, Arvind (2000): "Evaluating the Case for Export Subsidies", Policy Research Working Paper 2276, World Bank, Washington, D.C.

Reserve Bank of India: Report on Trend and Progress of Banking in India (2000-01), Mumbai.

Reserve Bank of India: Monetary and Credit Policy for the year 2001-2002, April 19, 2001, Mumbai.

Reserve Bank of India: Mid-term Review of Monetary and Credit Policy for the Year 2001-2002, October 22, 2001, Mumbai.

Satpathy, C. (1999): "Subsidies and Countervailing Measures: Case for Review of WTO Agreement", Economic and Political Weekly, August 21-28.

Stephens, Malcom (1999): The Changing Role of Export Credit Agencies, International Monetary Fund, Washington, D.C.

Srinivasan and Bhagwati (2001): "Outward-Orientation and Development: Are Revisionists Right?" in Deepak Lal and Richard H. Snape (eds.), Trade, Development and Political Economy, Palgrave, New York.

World Trade Organisation: Trade Policy Review, India, 1998, WTO, Geneva.

Annex – 1

Issues Relating to Simplification of Procedures for Hassle free
Delivery of Export Credit

For Bankers
Issues relating to simplification
of procedures for hassle free
delivery of export credit

1. Application form to be simple

1. Banks to simplify application forms by reducing irrelevant data. What is the present data requirement.
2. Exporters not to seek outside assistance for completing the application Forms.
3. To provide guidance for completing the application
4. To provide facilitation mechanism for assisting exporter customers for initial scrutiny and requirement of additional data etc.

2. Sanction Process

1. Time taken for sanction of credit limits

1. For fresh loans/renewals with enhancements - 45 days after submission of complete details.
2. For renewal of existing limits - 30 days.
3. For ad-hoc limit - 15 days.

2. Under consortium/multiple banking arrangements - all banks to commence sanction process simultaneously.
3. Banks to collect the required details/information at one go and not to seek information on piecemeal basis.
4. Banks to use appropriate method for assessment of credit limit suitable to the exporters products.
5. Banks to allow continuation of limit in cases where renewal is delayed.
6. Pending renewal banks to provide ad-hoc for urgent needs of exporters
7. For exporters with good track record limit to be sanctioned for a longer period with flexibility for step up/step-down of limits within overall outer limits depending on pre-determined performance parameters.
8. Criteria for - providing running account facility
9. In case of seasonal commodity peak/non-peak limits to be provided.
10. Interchangeability between pre/post export credit limit to be allowed vice-versa.
11. Over and above the sanction limit bills under L/C. to be allowed for negotiation.
12. Term loan requirements of exporters to be considered.

3. Delegation of Sanctioning Authority

1. Banks to delegate higher sanctioning powers to branches for sanction of export credit.
2. Bank to reduce some of the intervening layers in the sanction process for reducing the time lag.
3. System of joint appraisal by officials of branch and control/administrative wing.

4. Adequacy of credit and period of credit

1. Adequacy of credit

1. Banks to provide need based credit.
2. Credit not to be denied merely on the ground of non-availability of collaterals.

2. Period of credit

1. Period to take into account the production cycle of product (to provide need based extension for maximum upto 360 days).
2. Post-shipment credit period upto due date with provision for change of tenor at exporters need based request for a maximum period of upto 180 days from date of shipment.

5. Post sanction disbursement

1. Sanction to be conveyed in clear terms.
2. In case of exporters with good track record not to insist on submission of order/LC at every disbursement but to obtain a periodical statement of orders on hand.
3. Funds to be made available without any difficulty.
4. Once the goods have been valued and cleared by the customs authorities banks not to insist on submission of original sale contract/confirmed order/Proforma invoice etc. for handling of documents unless specified in the L/C.
5. Banks to dispatch documents immediately.
6. Banks to credit export proceeds quickly.
7. In case of delayed credit banks to pay interest for the delayed period.

Other facilities/services

1. Bank/Control Office to arrange exporters meet for resolving common issues.
2. Bank to provide Grievances Redressal System.
3. Bank to provide assistance for early realisation of export proceeds through correspondent bank.
4. Bank to have the approval of higher authorities for rejected proposal.
5. Bank to post-adequate staff in forex department duly trained and experienced.
6. Bank to be fully computerised and SWIFT facility for quicker service.

For Exporters

Issues relating to simplification
of procedures for hassle free
delivery of export credit

1. Application form to be simple

1. Simple and easy to fill up
2. Filled by the exporter/with outside help.
3. in case of outside help, cost
4. Specialised branches to provide facilitation mechanism for assisting exporter customer for initial scrutiny and requirement of additional data etc.

2. Sanction Process

1. Time taken for sanction of credit limits

1. For fresh loans/renewals with enhancement.- 45 days after submission of complete details.
2. For renewal of existing limits - 30 days
3. For ad-hoc limits - 15 days.

2. Under consortium/multiple bank arrangements - all banks to commence sanction process simultaneously.
3. Frequency of visits to the branch at bank's request for sanction of credit limits - up to 5 visits to be considered as normal.
4. Sanction terms to be conveyed clearly.

3. Adequacy of credit/period of credit/line of credit

1. Adequacy of credit

1. Need based credit to be provided
2. Credit not to be denied merely on the grounds of non-availability of collaterals.

2. Period of credit

1. Pre-Shipment Credit

In accordance with the production cycle of the product can be extended by banks up to 360 days in case of difficulties faced by the exporter.

2. Post - Shipment credit

Up to due date of the bill - maximum upto 180 days from the date of shipment. (Tenor of the bill can be extended by banks in case of need at exporters request before due date for a maximum period of upto 180 days from the date of shipment)

3. Line of credit

Limits are generally renewed after a period of one year

1. In case of delay in renewal of limits existing limits allowed to be continued
2. Urgent credit requirements to be met through grant of ad-hocs

4. Longer period of credit

Exporters with good track record to provide line of credit for longer period.

Facility for step-up/step-down in the limit to be provided at pre-detrimental performance parameters.

5. Interchangeability of limits

1. Adjustment of peak/non-peak limits to be provided
2. Adjustment of pre-shipment/post-shipment limits depending on the need.
3. When limits are full bills under L/C to be negotiated over and above the limit in case of need.

6. Term loan requirements

Bank to meet term loan requirements of the exporter for expansion of capacity, modernisation of machinery and up-gradation of technology.

4. Disbursement of export credit/credit of realised proceeds

1. Funds to be available immediately after sanction without any difficulty.
2. For exporters with good track banks to waive submission of order/LC for every disbursement.
3. Banks to obtain periodical statement of orders in hand.
4. Export proceeds to be credited expeditiously.
5. In case of delay in crediting proceeds banks to pay interest for delayed period.

5. Handling of export document

Once the goods have been valued and cleared by the customs authorities banks not to insist on submission of original Sale contract/confirmed orders/Proforma invoice counter signed by overseas buyer/indent from authorised agent for handling documents except in cases where L/C contained specific stipulations.

6. Post-credit relationship

Other related services rendered by the bank to be satisfactory.

1. Quick dispatch of documents to overseas buyer's bank.
2. Providing assistance for timely claim of insurance with ECGC.
3. Providing assistance for taking up the issues with foreign correspondent banks in case of delay in realisation of proceeds.

7. Other facilities

1. Staffs at the branch to be well trained and experienced for handling export credit and other related matters.
2. Branch to organise exports customers meet for resolving the general difficulties faced by the exporters.
3. Branch to provide customer's grievances redressal system for attending to complaints.
4. Branch to be fully computerised to have SWIFT facility for providing quick services.

8. Other Difficulties being faced by the exporters:-

1. Whether there is delay in getting the PP Forms counter signed by the Authorised Delaers.
2. In handling the export documents tendered after 21 days from the date of shipment.
3. In allowing reduction in value on account of cash discount on account of prepayment of usance bills.
4. In getting the variation in realisations accepted due to various factors as per terms of contract even after submission of documentary evidence.
5. In allowing reduction in value (subject to compliance with certain conditions) after submission of necessary documents.
6. In remitting the amount of export claims despite submission of necessary documents.
7. In getting the change of buyer accepted in case reduction involved is upto 10% of contract value despite submission of documents.
8. Delay in allowing `write off’ within the ceiling limit (10% of annual average export turn over) after compliance with terms and conditions and submission documents.
9. In getting the remittances connected with exports (like commission, legal charges etc.) made after submission of necessary documents.
10. In allowing refund of export proceeds in respect of re-import of goods due to poor quality despite submission of necessary documents.
11. In the operations of EEFC accounts.

9. Any other issues/suggestions.