Export-Import Bank of India is the premier export finance institution of the country. It is an apex institution for coordinating the working of institutions in India engaged in financing exports and import of goods and services. Exim Bank was established on Jan 01, 1982 (and started functioning wef March 01, 1982) under Export Import Bank of India Act 1981. It has its headquarters in Mumbai.
One of the major functions of EXIM bank is to facilitates financing, facilitating and promoting foreign trade of India. It is wholly owned by the Government of India. It can raise funds from loans/grants from government, RBI, bonds issued in india and credit from institutions abroad.
EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities overseas, to enable buyers in those countries to import developmental and infrastructure projects, equipment, goods and services from India, on deferred credit terms.
The operations of the Bank are governed by a Board of Directors. The Board of Directors consists of a chairman, a managing director, two deputy managing directors; one director each nominated by the Reserve Bank of India; IDBI Bank Ltd. and ECGC Ltd.; and not more than 12 directors nominated by the Central Government of, whom 5 directors are Central Government officials; not more than 3 directors are from commercial banks; and up to 4 directors are professionals with experience in export / import or financing.
Functions of EXIM Bank
The main functions of EXIM Bank are:
- Financing of exports and imports of goods and services.
- Financing of exports and imports of machinery and equipment on lease basis.
- Financing of joint ventures in foreign countries.
- Providing loans to Indian parties to enable them to contribute to the share capital of joint ventures in foreign countries
- To undertake limited merchant banking functions such as underwriting of stocks, shares, bonds or debentures of Indian companies engaged in export or import
- To provide technical, administrative and financial assistance for promotion, management and expansion of exports.
- Guaranteeing the obligations.
Authorized Capital of EXIM Bank
The authorized capital of EXIM Bank is Rs 10000 crore. The cabinet has given the approval to increase the authorized capital to Rs 20000 crore in 2019.
EXIM Product and Policies
EXIM banks provide finance to Indian companies, foreign companies and commercial banks in the form of Pre-shipment credit, term loans for export production, finance for export marketing, overseas investment finance, line of credit, export bill rediscounting, and overseas buyer’s credit.
Products offered by EXIM Bank
- Buyer’s Credit: The overseas buyer can open letter of credit in favour of Indian exporter. They can import goods and services on deferred payment terms. It reduces transaction cost and complexity of international transaction. The exporter can compete in international market.
- Corporate Banking:
- Finance for corporate to set up R&D facilities and export oriented units.
- Pre-shipment and post-shipment credit
- Letter of credit and bank guarantees
- Terms loan for expansion, modernization, upgradation and diversification projects.
- Financing for bulk import of machinery and equipment
- Lines of Credit: The lines of credit (LOC) is provided to enable exporters to enter new geographies, expand business in existing export markets without any payment risk from overseas importers. The LOC is extended to overseas financial institutions, regional development banks, sovereign governments and other overseas entities. It enables buyers from these countries to import development projects, machinery, equipment, goods and services on deferred credit basis. The LOC is extended on behalf of government as well as by EXIM Bank
- Overseas Finance Investment: The terms loans are provided:
- To Indian companies for equity investment in their overseas joint ventures, wholly owned subsidiaries
- To Indian companies for onward lending to their joint ventures, wholly owned subsidiaries
- To overseas JV/WOS of Indian companies towards part financing:
- Capital expenditure towards acquisition of assets
- Working capital requirements
- Equity investment in another company
- Acquisition of brands/patents/rights.
- Acquisition of another company
- Project Exports: The bank supports project activities in engineering, procurement and construction. The bank provides fund and non-fund facilities.
Services offered by EXIM Bank
The EXIM bank provides following services:
- Marketing Advisory Services: The bank provides marketing advisory services to create and enhance export capabilities and international competitiveness of Indian companies. It provides overseas marketing services on fee basis. It helps Indian companies to identify opportunities overseas for setting up plants/project or acquisition of overseas companies.
- Research and Analysis: The bank have experiences team of economists and strategists, who monitors trends in global and domestic economies. It analysis impact on Indian and other developing economies.
- Export Advisory Services: The bank offers diverse range of information, advisory and support services, that enables exporters to evaluate international risks, exploit export opportunities and improve competitiveness.
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