No ceiling on export credit to small cos

There is no ceiling on export credit given by public sector banks to small-scale companies, government informed the Lok Sabha on Friday.

Finance Minister P Chidambaram told the House that banks usually sanction the working capital, including export credit, after assessing individual customer's performance.

Replying to questions, he denied that small-scale pharma exporters were facing difficulties due to export credit limit prescribed or sanctioned by public sector banks.

Any credit of up to Rs 25,000 is cleared within a fortnight while that of above Rs 25,000 is cleared in 8 to 9

weeks, he said.

Giving details, Chidambaram said export credit to pharma industry had grown from Rs 12682 crore (Rs 126.82 billion) in 2004-05 to Rs 16200 crore (Rs 162 billion) in 2005-06, marking an increase of 30 per cent.

Given the comfortable position with regard to foreign exchange reserves in the country, the government is not compelling exporters to send money immediately but allowing them to retain it for up to one year.

On growth of pharma exports, he said exports were not easy because of strict regulations in foreign countries, which small companies are unlikely to meet.