EXPORT IMPORT BANK OF INDIA
www.edutap.co.in
1 www.edutap.co.in www.rbigradeb.wordpress.com
Contents
1 INTRODUCTION..................................................................................................................................................... 3
1.1 HISTORY............................................................................................................................................................. 3
1.2 Organization Structure ...................................................................................................................................... 3
1.3 Need for Exim Bank: .......................................................................................................................................... 3
2 Functions of Exim Bank ............................................................................................................................................. 4
2 www.edutap.co.in www.rbigradeb.wordpress.com
1 INTRODUCTION
EXIM BANK
Export-Import Bank of India is the premier export finance institution of the country that
seeks to build value by integrating foreign trade and investment with the economic rise of
India. The Bank has been guided by expertise at the Board level, by senior policy makers,
expert bankers, leading players in industry and international trade as well as professionals in
exports, imports or financing. With offices spread across India and in select locations of the
world, the bank aspires to boost the businesses of industries and SMEs.
1.1 HISTORY
Established by the Government of India, the bank commenced operations in 1982 under the
Export-Import Bank of India Act, 1981 as a purveyor of export credit, mirroring global
Export Credit Agencies. Exim Bank commenced its business operations in March 1982. It is
wholly owned by the GOI and was set up for the purpose of financing, facilitating and
promoting foreign trade in India. Its objective is to create export capability by arranging
competitive financing at various stages of the export cycle. Also, it is responsible for
developing commercially viable relationships with a target set of externally oriented
companies by offering them a comprehensive range of products and services, aimed at
enhancing their internationalization efforts.
1.2 Organization Structure
Shri David Rasquinha is the Managing Director of Exim Bank from February 2017. Its Board
comprises 13 directors appointed by the Government of India, including the Chairman and
Managing Director. These include five high-ranking Government of India functionaries,
three directors from scheduled commercial banks and four industry/trade experts. Key roles
are fulfilled by three directors nominated by the Reserve Bank of India (RBI), Industrial
Development Bank of India (IDBI) and ECGC Ltd. Its headquarter is located at Mumbai,
Maharashtra.
1.3 Need for Exim Bank:
Besides, the change in the world market and the creation of World Trade Organization
(WTO) compelled India to give a fillip to its export finance. All along, it was felt that the
Indian exporter needs only rupee finance. But it is only due to a change in the export policy
of promoting more value added export; the role of Exim bank was very much felt. It is time
3 www.edutap.co.in www.rbigradeb.wordpress.com
Exim bank provided finance for research and development as indigenous research plays a
crucial role owing to intellectual property rights.
2 Functions of Exim Bank
The following are the functions of Export Import bank:
1. Finance for exports and Imports: Exim bank helps by providing finance for exports and
imports of goods as well as services from India. One of the major export policies adopted by
government of India is the export of value added items. For example, all along we have
been exporting Hades and skins from India. Now, it is ‘processed leather’ in the form of
leather goods. So, the exporter who was earning 1 or 2 dollars while exporting Hades and
skins will now earn 25 to 30 dollars when he exports in the form of leather goods. Similarly,
import of raw materials such as gold will be financed by Exim bank, since it will be exported
as jewels which are again a value added export.
2. Finance on deferred basis: Exim bank provides finance on deferred basis for importing
capital equipment and other machinery. The cost of capital equipment in foreign countries
will be more and the Indian importer cannot afford to pay lump sum payment in foreign
exchange. The Exim bank provides guarantee on behalf on the importer and enables the
importer to make payment on installment basis to the foreign exporter. Or, the bank itself
may pay in bulk to the foreign exporter and receive installment payments from the Indian
importer.
3. Lease Finance: It provides lease finance for importing capital equipment. Under cross
border leasing, the lesser may be in a foreign country, while the lessee will be in India. The
Exim bank helps the Indian lessee in obtaining the capital equipment on lease by making the
lease payment in terms of foreign exchange. It also helps for import leasing, wherein both
the lesser and lessee will be Indians but the equipment imported on lease may be from
U.S.A or U.K.
4. Finance to export projects: Export projects in Third World countries are financed. India
has taken up various export projects in Third World countries, such as railway project in
Tanzania. Similarly, projects on some of the oil wells in Kuwait and Iraq taken up by Oil and
Natural Gas Commission (ONGC) are also financed by Exim bank. All the necessary
equipment and the manpower required for such projects will be financed by the Exim bank.
4 www.edutap.co.in www.rbigradeb.wordpress.com
5. Line of credit: The Exim bank provides line of credit to foreign importers so that exports
from India can increase. Under line of credit, exim bank will provide finance to the Central
bank of the borrowing country which in turn will provide to the commercial bank and
ultimately the credit will reach the importer. This kind of credit is safe as there is guarantee
of funds at every stage.
6. Refinance in foreign exchange: The Exim bank obtains bulk loan in foreign currencies in
the foreign exchange market and provides refinance to the financial institutions, providing
export finance. Different types of exporters may require different foreign currencies and
these are obtained by the Exim bank at a competitive interest rate and are given to
commercial banks for lending to exporters. It is due to this, the commercial banks are able
to provide pre-shipment and post-shipment finance to different exporters.
7. Contribution to Equity fund: The Exim bank also contributes to the shares, debentures of
Indian companies involved in exports. Export companies while raising capital, may issue
shares which may be partly financed by Exim bank. The bank may extend this facility as a
temporary finance as it will not retain the shares permanently. As a part of investment
policy or by way of portfolio investment, it may invest in the shares and debentures of
companies involved in exports.
8. Consultancy Services: The Exim bank also provides technical, administrative and other
assistance to exporters. Export projects are analyzed by the Exim bank from the point of
view of technical, managerial, marketing and financial feasibility. When it finds a project
viable, on the above grounds, it will not hesitate to fund it.
Apart from the above assistance, it is also providing discounting facilities for export bills.
There is also export finance for computer software exports. The exporters are provided with
market development assistance so that they can undertake advertising and sales promotion
activities in foreign countries. The bank signed a memorandum of understanding (MOU)
with European Bank for Reconstruction and Development. In the coming years, the bank is
likely to play a major role in the export of automobiles and other non traditional items.
Recently, EXIM Bank also released its online platform named ‘EXIM MITRA’ for delivering
trade information and facilitation of access to credit and insurance for exporters and
importers.
5 www.edutap.co.in www.rbigradeb.wordpress.com
The bank is primarily used to further the goals of India’s foreign trade policy, which has
thoroughly been discussed in the EXPORT IMPORT POLICY DOCUMENT + BOP DOCUMENT
+ ECONOMIC SURVEY MCQs in the ESI Course
3 Current Affairs Related to Exim Bank
In Exam questions is mostly asked from current affairs related to this topic, so please read
out monthly current Affairs Magazine and topic wise videos on current affairs .
6 www.edutap.co.in www.rbigradeb.wordpress.com
