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August 19, 2020

Gold Card Scheme for Creditworthy Exporters

by shivam jaiswal in Circular and Notifications, RBI

Gold Card Scheme for Creditworthy Exporters

Exports play a crucial role in a developing economy like India which attaches considerable importance to export promotion. As a part of the overall strategy of export promotion measures, the Reserve Bank of India has taken various steps to ensure expeditious and timely provision of financial assistance to the export sector at competitive rates of interest and remove procedural hassles.

With a view to further simplifying access to bank credit by exporters especially small and medium exporters and make it borrower friendly in terms of procedure and credit terms, the Minister for Commerce & Industry had proposed issuance of a Gold Card to creditworthy exporters with good track record for easy availability of export credit on best terms (vide Exim Policy 2003-04).

Accordingly, a Gold Card Scheme (Scheme) has been worked out in consultation with select banks and exporters. The Scheme envisages certain additional benefits based on the record of performance of the exporters. The Gold Card holder would enjoy simpler and more efficient credit delivery mechanism in recognition of his good track record.

Scheme was announced by RBI vide Circular No. RBI/2004/203- IECD No. 12 /04.02.02/Gold Card/2003-04 dated May 18, 2004.

Objectives of the Gold Card Scheme for Exporters

1. Gold Card holder exporters, depending on their track record and credit worthiness, will be granted better terms of credit including rates of interest than those extended to other exporters by the banks.

2. Applications for credit will be processed at norms simpler and under a process faster than for other exporters.

3. The `in-principle’ limits will be sanctioned for a period of 3 years with a provision for automatic renewal subject to fulfilment of the terms and conditions of sanction.

4. Gold Card holders will be given preference for grant of packing credit in foreign currency (PCFC).

5. Gold card holders, on the basis of their track record of timely realisation of export bills, will be considered for issuance of foreign currency credit cards for meeting urgent payment obligations, etc.

6. The charges schedule and fee-structure in respect of services provided by banks to exporters under the Scheme will be relatively lower than those provided to other exporters.

7. Since the bonafides of the Gold Card holder is already established based on credit worthiness and track record, the norms in respect of security and collaterals may be relaxed while granting export credit under the Gold Card Scheme.

8. The banks may consider any other facility/benefit to the exporters subject to the fulfilment of extant rules and regulations applicable to export finance.

Points to be covered under Gold Card Scheme for Exporters

(i) Eligibility of Gold Card Scheme:

  • Account should be standard for continuous 3 Years and should not be in the caution list of ECGC or RBI.
  • Exporter making Loss for past 3 years and having overdue export bills in excess of 10% of the previous year turnover are not eligible for Gold Card Scheme.

(ii) Concessions:

  • A concession of 0.25% in interest rate will be given in Pre/Post shipment finance.
  • 10% concession will be given in commission and exchange.
  • Premium under ECGC shall be borne by the Bank.

(iii) Benefits to Exporters:

  • In-principle limit sanction will be given for a period of 3 years provision for automatic renewal subject to fulfilment of the terms and conditions of the sanction.
  • A stand-by limit of 20% of the assessed limit may be additionally made available

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