As Sri Lanka grapples with a severe foreign exchange crunch, high street banks in India have turned cautious and selective about their exposures to the island nation. “We have not put a complete embargo on discounting export bills to Sri Lanka. Among other large banks, HDFC Bank was going slow on handling LCs for exports to Sri Lanka; Axis, which has financed many Indian companies with exports to Sri Lanka, is being selective; while ICICI Bank has cut limits for Sri Lanka along with some of the other smaller countries for quite some time now. “There is nothing wrong with banks in Sri Lanka. They are releasing money only after receiving it from the bank in Sri Lanka,” said a mid-sized exporter.

Source: The Nation January 09, 2022 20:28 UTC