IDBI Bank to offer rupee export credit at all branches

New age public sector lender IDBI Bank plans to offer rupee export credit from all its branches in a bid to increase its export credit portfolio.

Currently, IDBI Bank, being a relatively new bank, lags other Indian banks in fund-based export credit, according to B K Batra, deputy managing director.

''Fortunately, we have a large number of corporate relationships. What we have found is that our engagement with them vis-à-vis export credit needs to be improved,'' he added.

At present, IDBI offers export credit from 50-odd branches that are authorised to deal in foreign exchange.

These branches also support the export credit (both in foreign currency and rupees) requirements of exporters-customers of the 1,050 branches.

''Right now, 20-25 per cent of our exporter-clients avail of export credit (working capital) from us. So, we need to scale it up so that at least 50 per cent of the clients take partial export credit from us,'' said Batra.

The bank now plans to expand coverage of its export credit by increasing the number of touch points branches for customer interface.

IDBI Bank expects to increase its export credit disbursement from around Rs6,400 crore last year to about Rs 10,000 crore this year.

''If the touch point is directly facing the customer then it makes a lot of difference. The customer or his executives feel more comfortable if they can interact with a bank official and resolve issues relating to discounting of bills, get a Letter of Credit issued and get trade credit done across the table,'' said Batra.

IDBI Bank, Batra pointed out, currently makes rupee export finance available at the base rate (10.25 per cent) and export credit in foreign currency at the London Inter-Bank Offered Rate (Libor) plus 100 basis points.

''We want to give more thrust to working capital for exporters. Presence, pricing and products are the three areas that we are focussing on so that our export credit portfolio grows.

''As it is, our emphasis is on increasing working capital vis-à-vis term loan to de-risk the loan portfolio so that we have lesser long-term loans,'' said Batra.

Mumbai-based IDBI Bank has also decided to issue credit cards to its customers, nearly nine years after becoming a full-fledged commercial bank.

IDBI Bank proposes to issue around five lakh cards in three years - one lakh in the first year and two lakh cards each in the following two years.

The public sector bank, which currently has a base of more than 10 million customers, will be issuing EMV (Europay, MasterCard and Visa) chip cards with magnetic stripes.

IDBI Bank is planning to engage the services of a third party service (TPS) provider for providing end-to-end solutions for credit card issuance under the outsourced model.

The TPS provider, among others, will undertake operational activities relating to account updation, demographic changes, payment instructions, recurrent payment instructions and balance transfer request received through physical change request form/phone banking/net banking.