Convert Penalty to Banks into Working Capital Loan: Sakhtivel, AEPC

Appreciating Reserve Bank of India's latest measure to boost liquidity and give regulatory relief to businesses, Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel said that all the penalties levied by banks should be converted into a working capital term-loan with minimum interest and repayment till March 31, 2022.

He also said that the RBI has taken effective steps to protect the apparel exporters across the country.

"RBI's decisions to ensure access to affordable and collateral-free loans, a moratorium on term loans, deferment of interest on and easing of working capital financing, an increase of export credit period to 15 months from 12 months, an extension of packing credit period for existing loans and extension of Rs 15,000 line of credit to EXIM Bank will go a long way in ensuring the survival and growth of Indian Apparel exporters," Sakthivel said.

Increasing the maximum permissible period of pre-shipment and post-shipment export credit from the existing one year to 15 months, for disbursements made up to July 31, 2020 will help the exporters as they will not have to pay any penalty, he said.

Sakthivel further said that extending the time period for completion of remittances against normal imports from six months to twelve months from the date of shipment of such imports along with other reliefs are welcome steps.