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What is the role of EXIM Bank?

What is the role of EXIM Bank?

EXIM bank of India was established by Government of India in 1982 under the Export-Import Bank of India Act, 1981 for the purpose of 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 in overseas investment requirements of Indian entrepreneurs.   It also offers financial facility against deferred credit to overseas buyers of Indian consultancy, technology and other services.

EXIM bank has been supporting export-oriented units by catering 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 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. The direct finance to exporters through scheduled commercial banks is eligible for refinance from Exim Bank.

Financial assistance to Overseas Entities   

Exim Bank extends the buyers credit facility to overseas buyer of projects from India without recourse to Indian exporter. It also extends Buyer credit facility under NEIA to projects of overseas sovereign governments or the 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 above facility only against the sovereign guarantee of those Governments.

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