TIRUPUR EXPORTERS’ ASSOCIATION

62, Appachi Nagar Main Road, Post Box No:508, Kongu Nagar, Tirupur 

Tele: 0421-2220500, 2220606 Fax: 0421-2220505

Ref.:402/MoF/10

June 22,2010

All PressCorrespondents

DearSirs,

In a pressrelease issued today, Shri.A.Sakthivel President said that he has sent a letterto Shri.Pranab Mukherjee,Hon’ble Union Minister of Finance requesting to exempt exporters frombase rate model and advise to provide the export credit at a concession rate of7%and the copyof letter sent toHon’bleUnion Minister of Finance isenclosed.

Thisis in favour of publication.

Ref.: 394/M-MoF/10

June 17, 2010

Shri.Pranab Mukherjee

Hon’ble UnionMinister of Finance,

Ministryof Finance

GovernmentofIndia

NorthBlock

NewDelhi.

Fax: 011-23093289

RespectedSir,

Sub:Requisition to exempt exporters from Base RateModel – Reg.

* *  *

Wewholeheartedly thank the Hon’ble Finance Minister for taking various prudentialmeasures for the past 1½ years and steered our economy to record 7.2% growth inGDP in the year 2009-10 and this achievement has come at a time when otherdeveloped countries are struggling to show 3% growth in GDP. Thecountry has successfully overcome the effect of the global economic slowdown andwe expect the GDP will grow at 8.5%during fiscal 2010-11.

Sir,RBI has proposed to implement the Base Rate Model on 1^stJuly 2010after replacing the current Benchmark Prime Lending Rate (BPLR) and afterwardsthe actual lending rates charged will be Base Rate plus other specific changes,which will increase the interest rate costlier to exporters, as the concessionalexport credit facility available (Benchmark Prime Lending Rate – 2.5%) underBPLR system to exporters will be withdrawn.

Ourconcern is that in spite of concessional facility extended to exporters in theinterest rate, the credit for export is still higher than internationalbenchmarks and straight away reducing our competitiveness in the global market.  The bank interest rate available to ourmain competitors inChinais only 5.23%.

Inview of this, we request the Hon’ble Finance Minister to kindly advice the RBIto exempt the exporters from the proposed base rate system and provide theexport credit at a concession rate of 7%.

Thankingyou

Yoursfaithfully

Sd/-

A.Sakthivel

President