EXIM Bank (Export-Import Bank of India) is a leading export finance-based institution in India which engages in integrating Foreign Trade and Investment with the national economic growth. It aims to enhance the exports from India and promote the country’s international trade. The Bank primarily lends for exports from India, including supporting overseas buyers and Indian suppliers for export from India.
Overview of EXIM Bank
|Owned by||Government of India|
|Regulated by||Reserve Bank of India (RBI)|
|Aim||Financing, facilitating and promoting foreign trade of India|
About the EXIM Bank
In September 1981, the Government of India passed the Export-Import Bank of India Act of 1981 during the Sixth Five-Year Plan (1980-85). Under this Act, the government set up the Export-Import Bank of India (EXIM Bank) in 1982 as a purveyor of export credit. The Bank commenced its operation in March 1982 with an initial capital of 44 crore rupees.
The Government of India wholly owns the EXIM Bank, and the Reserve Bank of India (RBI) regulates it. The headquarter of EXIM Bank is in Mumbai, Maharashtra. Its main aim is to finance, facilitate, and promote foreign trade in India. It provides Direct Lending and Refinancing through an institutional agency identified by RBI.
Board of Directors
A Board of Directors governs the operations of the EXIM Bank. The Board of Directors consists of:
- One Managing Director,
- Two deputy Managing Directors,
- One Director appointed by the Reserve Bank of India,
- One Director nominated by IDBI Bank Ltd.,
- One Director nominated by ECGC Ltd. (Export Credit and Guarantee Cooperation Limited),
- Not more than 12 Directors are 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.
Objectives of EXIM Bank
The Objectives of EXIM Bank include:
- To provide financial assistance to exporters and importers and function as the principal financial institution for coordinating the working of institutions engaged in financing exports and import of goods and services, with a view to promoting the country’s international trade.
- To act on business principles with due regard to the public interest.
Vision – EXIM Bank
The EXIM Bank’s vision has transformed from a product-centric approach with Export Capability Creation and Export Credits to a more customer-centric approach by providing a comprehensive range of products and services to empower business at all stages of a company’s business operation.
The Bank aims to utilise the leadership and expertise in Export Finance to make a lasting difference to Indian companies with global aspirations. Its mission is to facilitate the globalisation of Indian Business.
Functions of EXIM Bank
The main functions of the EXIM Bank are as follows:
- It finances the exports and imports of goods and services from India and countries other than India.
- It provides refinancing services to banks and other financial institutions for their capital requirements for foreign trade.
- It also underwrites shares/stocks/debentures/bonds of companies engaged in foreign trade.
- It offers short-term loans or lines of credit to foreign banks and governments.
- It provides technical and other assistance to importers and exporters.
- It finances the import or export of machinery and equipment on a lease or hire-purchase basis.
- It can also provide business advisory services and expert knowledge to Indian exporters regarding multi-funded projects in foreign countries.
- It also facilitates investments by Indian companies abroad for setting up joint ventures, subsidiaries or overseas acquisitions.
It serves as a growth engine for industries and SMEs (Small and Medium-sized Enterprises) through a wide range of products and services. It plays a vital role in helping Indian companies to do business abroad and bring in foreign exchange. The EXIM Bank’s functions take place through its financial products and services.
EXIM Bank – Financial Products
Buyer’s Credit is a credit facility program through which the overseas buyers can open a “letter of credit” in favour of an Indian exporter and could import goods and services from India on deferred payment terms. With this, the exporter enjoys reduced transaction costs and complexities of international trade transactions. This program facilitates exports for SMEs by providing credit to overseas buyers to import goods from India.
Under this, the EXIM Bank offers a range of financing programmes to enhance the export competitiveness of Indian companies. The Bank provides support for export-oriented units by catering to long-term long requirements, which help exporters finance new projects, expand, modernise or purchase new equipment, carry out Research & Development, and cater to their working capital and overseas investment requirements.
Lines of Credit
Through the Lines of Credit (LOCs), the Indian exporters can enter new geographies or expand their business in existing export markets without any payment risk from overseas importers.
EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities abroad in order to enable buyers in those countries to import developmental and infrastructure projects, equipment, goods and services from India on deferred credit terms.
Overseas Investment Finance
The EXIM Bank can provide access to foreign markets by offering term loans to Indian companies for equity investment in their overseas Joint Venture, Wholly Owned Subsidies.
It encourages project exports from India and helps Indian companies secure contracts abroad. It also provides aid to project activities in engineering, procurement, and construction (civil, mechanical, electrical or instrumental).
UBHARTE SITAARE Programme
“UBHARTE SITAARE Programme (USP)” identifies Indian companies that are future champions with good export potential. An Identified company should have potential advantages regarding technology, product or process. The EXIM Bank can support eligible companies with both financial and advisory services.
EXIM Bank – Services
Marketing Advisory Service
Marketing Advisory Services help Indian exporters in their globalisation ventures by proactively assisting in locating overseas distributors/buyers/partners for their products and services. The role of Marketing Advisory Services is to identify opportunities abroad for setting up plants or projects or acquiring overseas companies.
Research and Analysis
Exim Bank’s Research and Analysis Group (RAG) is a team of experienced economies and strategies who steer the group with in-depth insights on international economies, trade and investment through qualitative and quantitative research techniques. The Group monitors trends in global and domestic economies to analyse their impact on Indian and other developing economies.
Export Advisory Services
The Export Advisory Services Group (EAS) offers a diverse range of information, advisory and support services, which enable exporters to evaluate International Risks, exploit export opportunities and improve competitiveness.