Flexibilty in Shipment Credit to benefit exporters

New Delhi, May 29 (UNI) Flexibility in the operation of the Pre (Post) Shipment Credit in Foreign Currency (PCFC) being extended to the exporters in view of the currency re-alignment that has taken place recently with the weakening of the dollar is desirable.

Industry chamber PHDCCI in a statement today has proposed that exporters be allowed to operate in currencies other then dollar.

''We propose a re-thinking on this issue by the banks and institutions to address the issue of hardening of rupee against greenback and increasing trend of the exporters to switch over to currencies other than the dollar for effecting the export/import transactions as revealed in a recent survey undertaken by the chamber,'' said PHDCCI President Sanjay Bhatia.

PCFC withdrawals in cross currencies are allowed, subject to the exporter bearing the risk in currency fluctuations. However, in practice withdrawals are mostly restricted to the dollar, said the statement.

For an export order in a non-designated currency like the Swiss Franc, PCFC will be given only in dollars. According to the guidelines of banks, the pre and post shipment credit for orders booked in Pound Sterling, Euro and the Japanese Yen can be availed in the respective currencies or dollar.

However, practically credit is disbursed in dollars.

Multiple currency withdrawals against the same order are not permitted, for the sake of operational convenience.

UNI