Exim Bank's capital to increase five-fold to Rs 10,000 cr

Source :16 NOV, 2011, 05.22PM IST, PTI 

NEW DELHI: The Cabinet on Wednesday approved draft amendments to a law governing the Exim Bank, proposing an increase in its authorised capital from Rs 2,000 crore to Rs 10,000 crore. 

Besides, the Export Import Bank of India(Amendment) Bill, 2011 proposes appointment of two whole-time directors, other than the Chairman and Managing Director. The government will take the amendment bill to Parliament in the near future. 

The Exim Bank, which plays a vital role in financing of export and import deals, is governed under the Export-Import Bank Act, 1981. 

"Increase in the authorised capital would enable the bank to take higher export credit exposures and enable it to borrow funds to disburse under export line of credits," an official statement said after the Cabinet meeting. 

The bill also seeks to empower the Central government to further increase the authorised capital of the Exim Bank without any more legislative changes. 

By appointing two whole time directors, the management structure of the bank would be strengthened, it said. 

Exim Bank was set up as a corporation in 1982 under the Export Import Bank of India Act, 1981 for providing financial assistance to exporters and importers. 

It also functions as the principal financial institution for coordinating the working of different institutions in export financing and import of goods and services. 

During 2010-11, 22 Letters of Credit (LoC) aggregating USD 2.38 billion were given by the Exim Bank to support export of projects, goods and services from India. 

As on March, 2011, the Bank has a credit commitment of USD 6.66 billion covering 72 countries in Africa, Asia, CIS, Europe and Latin America.

Bi-annual review of Exim Bank financed overseas projects: Govt

Source : PTI :New Delhi, Oct 12,2011




With an aim to monitor end use of soft loan assistance by the Exim Bank to other countries, the Finance Ministry today said that all such projects will be monitored twice a year by a special committee.

The Bank provides Line of Credit (LoC) under the Indian Development and Economic Assistance Scheme to poor, low and medium income countries.

"There shall be a periodic (bi-annual) monitoring of all LoCs issued under this scheme by a committee comprising officers of Ministry of External Affairs, Department of Economic Affairs and Export-Import Bank of India," the Finance Ministry said.

During 2010-11, 22 LoCs aggregating USD 2.38 billion were extended by the Exim Bank to support export of projects, goods and services from India.

As on March, 2011, the Bank has in place 138 LoCs covering 72 countries in Africa, Asia, CIS, Europe and Latin America with credit commitments aggregating USD 6.66 billion.
Revising the guidelines for LoCs, the ministry also has asked borrowing governments to set up suitable monitoring mechanism in association with the Exim Bank and respective Indian missions.
This is to ensure that the work on the Exim Bank financed projects are executed as per the agreement without time or cost over-runs.

"Regular progress reports on the utilisation of Government of India supported LoCs, implementation of the projects covered under the LoCs and servicing of the LoCs should be made available to MEA every six months through the concerned Indian missions," it added.
The new guidelines also mandate that a status report on execution of the projects should be submitted every six months by the executing authorities.

In case of delay in any project under Exim Bank''s LoC, the concerned Indian diplomatic mission has been directed to coordinate a joint site visit with the respective government to ascertain the reasons and redress them.

The Finance Ministry said that in case of granting Exim Bank loans the government''s priority would be export of goods and services required in the markets of the recipient countries and to facilitate bilateral trade.

"The mission may also provide to the Government of India input on long-term economic interest that these LoCs have resulted in creating in the recipient countries," it said.

Export-Import Bank of India is the premier export finance institution and also facilitate and promote foreign trade of India. It was set up in 1982.

Exim Bank to begin new lines of biz in export finance

Source : BL:MUMBAI, APRIL 28:2011

In a strategic move, the Export-Import Bank of India (Exim Bank) has decided to gradually get out of businesses where it is in direct competition with commercial banks.

Towards this end, Exim Bank, according to its Chairman & Managing Director, Mr T.C.A. Ranganathan, is whittling down its portfolio of short-term loans and exiting the packing credit business.

Instead of competing with commercial banks, Exim Bank will concentrate on its core competencies in the field of export finance.

While lines of credit and project exports will continue to be its bread and butter businesses, the development financial institution (DFI) will also focus on new lines of business such as Buyers' Credit (non-recourse lending) and R&D financing.

“We want to play the role of a catalyst. As a development financial institution, we will seed new lines of business in the export finance area so that commercial banks can enter the same,” said Mr Rangathan.

Buyers' Credit has been launched by Exim Bank in association with the Export Credit Guarantee Corporation of India under the Government's National Export Insurance Account to boost exports.

To support R&D by export-oriented units in fields such as pharmaceuticals, engineering and hi-technology, the DFI will offer term loans or a hybrid facility to the extent of 80 per cent of the R&D cost.

On new initiatives, the Exim Bank chief said the bank has started giving loans that are benchmarked to the government security, with one-year residual maturity, to companies with active treasury operations.

The DFI has moved the government to increase its authorised capital to Rs 10,000 crore so that it can support exporters in a big way. Currently, its paid-up capital is at Rs 2,000, the same as its authorised capital.

Meanwhile, Exim Bank has reported a 12 per cent increase in profit after tax at Rs 868 crore in the financial year ended March 31, 2011, against Rs 772 crore in the corresponding period last year.

Loan assets increased by 17 per cent in FY2011 to Rs 46,041 crore from Rs 39,371 crore as of March-end 2010.

Rs 2,000 cr fund for large overseas buys by EXIM Bank

Source : Yogima Seth Sharma,Digitalfc: Apr 06 2011 , New Delhi

  " Always remember that the future comes one day at a time. "

                                                                                  -Dean Acheson

                    -

In a move that could boost project exports in India,
Export-Import Bank of India 

(Exim Bank) along with Export Credit Guarantee Corporation (ECGC)
 of India has set aside Rs 2,000 crore to provide buyers’
 credit to large projects overseas.


 This will benefit companies
 like ONGC, Bhel, Punj Lloyd and L&T,
 as they are bidding for projects overseas.

The scheme, which is buyer’s credit under National Export Insurance Account (NEIA), would come with maximum exposure of $ 2 billion from ECGC with $ 100 million cap for each project.

It will be used to fund big projects abroad with eight to 10 years gestation period and 85 per cent of the contract value will be funded. Under the scheme, sovereign governments and government-owned entities will be eligible for credit for import of goods and services from India on deferred payment terms.

 Though Exim Bank continues to provide credit to buyers, currently it is low value credit with five years tenure. “The move is aimed at enabling larger project exports in sectors like power, roads, railways, water resources, oil and gas to provide competition to Indian companies vis-à-vis peers from other nations in project bids,” TCA Ranganathan, chairman and managing director of Exim Bank of India said.

Exim Bank has also identified 30 countries where bulk of funding would be focused. These are in Central Asia, Africa, West Asia, South-east Asia and Eastern Europe and include countries like Bangladesh, Maldives, Indonesia, Vietnam, Libya, Morocco, Nigeria, Kenya, Zambia, Uganda, Kazakhstan, Russia and Belarus.

“At this juncture, we will provide total cover of $ 2 billion with single project exposure of $ 100 million. However, we hope to take the total cover to $ 10 billion with single project cover of $ 1 billion as more and more Indian companies are bidding for government-run projects overseas,” Arvind Mehta, chairman of ECGC added.

Exim Bank to join hand with banks to offer joint products

Source : : PTI May 16 2010 , Kolkata

The Exim Bank has decided to join hands with commercial banks to offer comprehensive products to companies in foreign trade.

"We have decided not to get into a rate war with banks in the areas we operate, but rather complement them in offering services and products," Exim Bank Chairman and Managing Director T C A Ragnganathan told PTI.

"There are some products which commercial banks are not interested in, like country risk and cluster financing," he said.

"We will try to offer single window service to an organisation where few products may be offered by commercial banks and we will offer complete solutions to trade without affecting our margins," Exim Bank Executive Director Prabhakar Dalal said.

He, however, said that this did not mean that existing products would not be offered if required.

Dalal said the focus would also be in offering financing for overseas investments by Indian corporate entities.

Ragnganathan said it would take time for the shift in strategy and in the next six to 12 months, some results would be seen.

Meanwhile, Exim Bank's total borrowings for 2010-11 would be Rs 24,000 crore, 20 per cent higher than the previous year.

The bank would raise the amount through a mix of rupee and foreign currency loans.

It was close to raising USD 100 million from the Asian Development Bank (ADB) to provide funds to eligble SMEs.

"We are in the final lap to raise USD 100 million for small and medium enterprises in states like Assam, Madhya Pradesh, Orissa, Uttar Pradesh, Chhattisgarh, Jharkhand, Rajasthan and Uttarakhand," Ragnganathan said.

The bank intended to extend loans through development of clusters in different sectors.

The foreign trade development bank had also raised 150 million euro from the European Investment Bank to promote green energy and projects that reduce greenhouse gas emissions.

Another USD 200 million was raised through five-year bonds from the euro dollar market.