Banks Increase Oversight on Export Loans Following RBI Relief Measures
Banks are expected to increase scrutiny on loans extended to export-driven companies as the Reserve Bank of India’s (RBI) recent relief measures for exporters come into effect. Analysts note that sectors like garments, jewellery, auto components, and leather articles—largely comprising MSMEs—could face vulnerability due to tariffs and temporary mismatches in dollar inflows resulting from the extension of export repatriation from nine to fifteen months.
Experts highlight that banks will closely monitor asset quality, especially where exporters have availed moratoriums or deferments. While provisions of around five per cent on such loans could rise, the impact on near-term profitability is expected to be limited. Similar to the Covid-19 period, the option to extend moratoriums remains, with banks evaluating fresh loans on an entity-to-entity and sector-to-sector basis.
Officials also stress that RBI’s measures provide crucial liquidity support. The extension of export credit up to 450 days, repayment deferments till September 2026, and reassessment of limits offer exporters immediate relief. Lenders expect the stress on export loans to be temporary, with government efforts underway to resolve trade disruptions and facilitate bilateral agreements.
Pic Courtesy: google/ images are subject to copyright
