The Nationalised banks do not pass on the benefits of the low interest tax
regime implemented by the Reserve bank of India to the Exporters and Export
Finance in India continued to be high compared other financial markets of the
world, Engineering Export Promotion Council has charged the government.
The banks decline to
pass on the benefit to the Exporters for whom the low interest regime is
When Reserve Bank reduces interest rates periodically, the banks swing into
action and immediately reduce the interest rates for depositors. They do not
spare even the senior citizens but decline to pass on the benefit to the
Exporters for whom the low interest regime is intended.
While RBI's lower interest rate regime is intended at supporting growth,
steps need to be taken for full transmission of the rates to the exporters and
end-customers at large. Export finance continues to be high in the country when
compared with other similar markets, said Chairman of Engineering Export
Promotion Council India Mahesh Desai.
Commenting on monetary policy statement, Mr Desai said that RBI must advise
all the banks to pass on full benefits of low interest rate to borrowers
He said that the central bank has kept the key interest rate unchanged at 4
per cent on expected lines. Further, it has retained the accommodative stance
given that the second wave of pandemic poses threat to growth.
RBI has maintained the GDP growth forecast at 10.5 per cent for the current
Some of the macro indicators such as GST collection and merchandise export
figures in the last few months have shown economic growth gathering pace from
historic low last year. “But given the surge in Coronavirus cases and
restrictions imposed by various states to contain the pandemic, there are
Moreover, there have been periodic lockdowns in several western countries
which could slow down the ongoing recovery in international trade, said Mr