He gave this indication while responding to several queries raised by exporters on the new Foreign Exchange Management Act (Fema) and Exchange Earners Foreign Currency Account (EEFC) at an open house meeting organised by Federation of Indian Export Organisations (FIEO) in New Delhi on Saturday. Biswas also indicated that the recent cut in EEFC account maintained by exporters was a"temporary" measure, addding that he could not say whether the measure had helped stem the slide in the value of the rupee. Special secretary (Banking) Devi Dayal said that exporters "deserved" income tax and excise concessions so long as exports performed well and the balance of payments position remained conmfortable.

Stating that Fema was more "export-friendly" than Fera (Foreign Exchange Regulation Act, 1973,) Biswas said the enforcement directorate would investigate cases only if they were reported to it. Further, a sunset clause had been introduced in FEMA whereby all previous Fera cases would have to commence before May 30, 2002, he added.

Exports of services had been defined and brought under Fema, he said adding that a threshold has been set $5,000 a year for travel abroad by exporters and others and beyond this amount, RBI's permision was required. Dayal said that the net export credit to net bank credit was 12.5 per cent in 1993-94, 13.5 per cent in 1994-95, 13.6 per cent in 1995-96, Central bank to issue fresh export import transaction guidelines but it declined to 11.01 per cent in 1996-97 and further to 10.7 per cent in 1999-2000.

He assured adequate and timely bank credit to exporters and noted that some banks had been rather conservative in their approach in this regard. Bank credit should not be denied to the exporting community or industry purely on grounds that a collateral security could not be provided for the purpose, he stressed.

MA Sheikh, General Manager, Export Credit and Guarantee Corporation (Northern region), Mumbai, urged exporters to initiate action to recover claims due from their buyers through solicitors, lawyers abroad before ECGC stepped in.

Earlier, FIEO pesident Navrata Samdria noted that Fema had some provisions which he said would like to be moderated. For instance, the penalty imposed under the Act was quite hefty, which he feared that many exporters would find it diffiult to comply with, as the amount had to be paid at the time of adjudiction. Fema had, however, some features as well, he stated.

He wanted the government to accord exports a top priority status for lending so that the interest rate charged to exporters could remain within the prime lending rate. He also sugested that that in the case of exporters, the concept of "overdue credit" should not figure for a period falling within 180 days.