The Export-Import Bank of India, set up in 1982, for the purpose of financing facilitating and promoting foreign trade of India, is the principal financial institution in the country for coordinating working of institutions engaged in financing exports and imports.
The Exim bank is fully owned by the Government of India and is managed by a Board of Directors with representation from Government, financial institutions, bank and business community. The operations are grouped into Project Finance. Trade Finance and Overseas Investment Finance, supported by Planning and Co-ordination Groups.
Objectives and Functions:
The objectives and functions of the Exim Bank include the following:
1. Grant of loans and advances in India solely or jointly with commercial banks to persons exporting or intending to export India goods which may include the export of turnkey projects and civil consultancy services.
2. Grant of lines credit to Governments, financial institutions and other suitable organizations in foreign countries to enable person outside India to import from India, goods including turnkey projects, civil construction contracts and other services including consultancy services.
3. Handling transaction where a mix of government credit and commercial credit for exports is involved.
4. Purchasing, discounting and negotiating export bills.
5. Selling or discounting export bills in international markets.
6. Discounting of export bills negotiated or purchased by a scheduled bank or financial institution notified by government, or granting loans and advances against such bills.
7. Providing refinance facilities to specified financial institutions against credits extended by them for specified exports or imports.
8. Granting loans and advances or issuing guarantees solely or jointly with a commercial bank for the import of goods and services from abroad.
9. Issuing confirmation/endorsing letters of credit on behalf of exporters in India, negotiating, collecting bills under letters of credit, opening letters of credit on behalf of importers of goods is services and negotiating documents received there under.
10. Buying and selling foreign exchange and performing such other functions of an authorized dealer as may necessary for the functions of an export- import bank.
11. Undertaking and financing research, surveys and techno-economic studies bearing on the promotion and development of international trade.
12. Providing technical, administrative and financial assistance to any exporter in India or any other person who intends to export goods from India for the promotion, management or expansion of any industry with a view to developing international trade.
The Exim bank extends both funded and non-funded assistance for promotion of foreign trade.
The funded assistance program of the Bank includes direct financial assistance to exporters, rediscounting of export bills, technology and consultancy services financing, refinancing of export credit and re-lending facility to banks abroad.
The non-funded assistance is in the form of guarantees which are in the form of bid bonds, advance payment and performance guarantees, retention money guarantees and guarantees for raising finance abroad.
The Exim bank participates with commercial banks in India in the issuance of guarantees in foreign currencies on behalf of Indian exporters/contractors in favor of overseas importers/employers and banks.
Exim Syndication facility was later introduced to attract greater participation in export credit by commercial banks in India who are authorized dealers in foreign exchange. Under this scheme, the Exim Bank provides funds for an export proposal and syndicates the credit risks to commercial banks, ad the banks for assuming the risks earn a commission of 0.5 percent annum from the Exim Bank.
The Exim bank also provides information and advisory services to enable exporters to evaluate the international risks, export opportunities and competitiveness. These include country studies, merchant banking services, advice on international marketing and data to enable effective participation in opportunities offered by projects by multilateral institutions.
Further, the bank carries out Research and Analysis on specific industry sub-sectors with export potential international trade related subjects. These are widely disseminated amongst exporters, academicians, industry and trade organizations and government.
Thus, the Exim Bank follows a three pronged strategy to promote Indian exports. More than export finance, the Bank is engaged in export capability creation.