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Deeptha Rajkumar

KOCHI, March 6

THE Reserve Bank of India (RBI) has approved a relief package for exporters of marine products in a bid to tide them over their financial difficulties.

Currently around 70-80 per cent of the 300-odd units in the marine sector are facing financial problems largely due to heavy investments necessitated by the pressure to improve infrastructure.

Banking sources told Business Line that RBI has advised banks to implement the relief package with respect to eligible accounts with immediate effect. The proposals for restructuring of accounts are to be disposed off within 30-45 days of receipt of the scheme from the unit. An RBI official is to be appointed specifically to co-ordinate with MPEDA for this purpose.

The revival package, however, can be availed only by viable units and would be need-based fresh finance. ``Only fully secured standard and sub-standard accounts would be considered for rehabilitation and the repayment period of the restructured accounts would be restricted to a maximum of 7 years. We will also be required to present a project report highlighting our ability to meet and sustain production,'' sources said.

The premier bank is also offering a one-time or compromise settlement scheme to NPA borrowers, of their outstanding dues. The scheme will cover NPAs that have become doubtful or loss assets as on March 31, 2000 with an outstanding balance of Rs 10 crore and below.

Aquaculture diseases, the Supreme Court decision banning all units within 500 m of high tide zone, imposition of strict quality standards by the EU, ban by the US-based FDA are but some of the problems that has dogged the industry over the last 4-5 years.

``There are about 120 units which were able to meet EU standards while the remaining ones conform to the national standards. While a minimum investment of Rs 1 crore is required to upgrade a unit to meet EU standards, an investment of Rs 60-80 lakhs is needed to attain national standards. As the banks had not largely met such huge requirements of funds, the units resorted to large-scale diversion of short term funds for modernisation thereby ending up in a deeper financial quandary,'' sources in seafood industry said.

On their part, banking sources maintain that given the fact the level of NPAs in this sector in several banks was as high as 60 per cent, the rehabilitation package cannot be loaded heavily against the banks and should include a reasonable amount of promoter's contribution apart from being within RBI guidelines.

``Very often, the NPAs are a result of non-adherence to quality standards by the borrowers, difficulties in verification of stocks and non-transparency in balance sheets due to which the problems surfaced only when it was too late,'' a bank official said.

In response to this, the premier bank has asked MPEDA to address the issues relating to setting up of a group of experts for valuation/verification of stocks and annual rating of units judiciously.

Select members of the seafood industry had met with the Government officials, RBI and other public sector banks with large exposure to the marine sector in the recent past to put forward their case for rehabilitation.

They also discussed the need to evolve working capital norms for each category of marine activists as the lead period for each of them varied and general norms resulted in under-financing of the units. A request for packing credit at uniform rate of interest and extension of the PCFC loans was also put forward.

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RBI readies relief package for seafood exporters

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