What is the role of EXIM Bank?

EXIM Bank of India was established by the Government of India in 1982 under the Export-Import Bank of India Act, 1981 for financing, facilitating, and promoting India’s international trade. The bank conducts export market studies and assists Indian Joint ventures in third countries. The bank offers international merchant banking services and financing for overseas investment requirements of Indian entrepreneurs.   It also offers financial facilities against deferred credit to overseas buyers of Indian consultancy, technology, and other services.

EXIM bank has been supporting export-oriented units by catering to their long-term loan as well as short-term loan requirements like pre-shipment and post-shipment credits both in Rupees and foreign currencies reflecting global Export Credit Agencies, Facilities are extended to new projects, as well as modernization and R&D programs of existing units. The bank extends credit facilities for Deemed Export contracts, Capital Equipment Finance, and non-fund-based facilities like Letters of Credit / Guarantee, etc. Indian importers are also eligible for direct EXIM bank finance. The importing companies who do not have export operations can approach the bank for financial assistance for the import of equipment, machinery, and technologies, services for capacity expansion, modernization, and infrastructure projects.

 Commercial Banks’ finance in participation with EXIM bank

Commercial banks in India extend funded / non-funded facilities to Indian exporters directly or on risk syndication (risk participation) with the EXIM bank. Direct finance to exporters through scheduled commercial banks is eligible for refinancing from Exim Bank.

Financial assistance to Overseas Entities   

Exim Bank extends the buyers’ credit facility to overseas buyers of projects from India without recourse to Indian exporters. It also extends the Buyer credit facility under NEIA to projects of overseas sovereign governments or government-owned entities. This facility is available for projects of Indian exporters requiring medium and long-term deferred credit. For the projects of non-government agencies in third countries, it extends the above facility only against the sovereign guarantee of those Governments.

Related Posts: