Shri. A.Sakthivel, President, FIEO and also President of TEA, today mentioned that he has submitted a memorandum to Union Commerce Minister Shri. Kamalnath with a requisition to advise the banks to keep the overdue receivables from derivative contract in a suspense account without deducting interest rates.
Shri. Sakthivel said that many exporters, including knitwear garment exporters in Tirupur have lost substantially in derivatives products offered by financial institutions at a time when exporters hedged their risk in the wake of appreciation of Rupee against dollar.
The Small and Medium Enterprises (SMEs) loss itself in the country is over Rs 2000 crore and the Derivative products as a whole were miss sold by banks to all SME sector by utilizing the adverse situations and ignorance of the customers. Shri. A. Sakthivel stated Banks also violated all the stipulated norms and procedures of RBIвЂ™s guidelines & rules.
Shri. A. Sakthivel informed that the Parliamentary Committee has already included all the all the affected exporters in detail and also RBI and added that subsequently RBI issued a circulars vide letters dated 13th October 2008 and 29th October 2008 to all the involved banks that all the derivative bookings happened in the period of вЂњApril 2007-June2008вЂќ and their proceeds either loss or profit should be maintained in a suspense account without deducting the interest rates. It should not be taken into consideration to paralyze the other funding if this particular dues exceeds the stipulated 90 days period.
Shri. A. Sakthivel pointed out that the Banks have to be instructed to solve this issue on the basis of вЂњno-profit no-lossвЂќ basis wherein the clients would be made to pay back whatever the profit accrued by them through this derivative product and further the banks should not claim any loss out of it. This could be made valid for those contracts entered between April 2007 & June 2008.