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Banking & Credit :: EXPORT IMPORT BANK OF INDIA (EXIM BANK)
The EXIM Bank was set up in January 1982 with the main object of giving a boost to the country’s export promotion drive and to pay for the increased imports. It took over the operations of the International Finance Wing of the IDBI. It acts as the apex agency in coordinating the activities of the other institutions engages in the financing of exports and imports of goods and services.
The Bank is responsible for providing refinancing facilities to the commercial banks and other commitments in the areas of exports and imports. As observed in the Export Import Bank of India Act, 1981: “……the Bank may grant, in or outside India‚ loans and advances by itself or in participation with any bank or financial institution whether in India or outside India‚ for the purpose of export or import and shall also function as the principle institution engaged in financing of the export and import in such manner as it may deem appropriate….”
Within the framework of the basic aim of the Bank‚ the objectives of the Bank may be summarized as under:
Broadly‚ the Bank provides two types of assistance‚ viz., (i) funded assistance and (ii) non-funded assistance.
Funded assistance is provided to Indian exporters to enable them to operate in international markets. In particular‚ it includes the following:
1. Loans to Indian Companies
(a) Direct financial assistance to exporter in the form of medium term credit to enable them to extend deferred credit to overseas buyers;
II. Loans to Foreign Governments‚ Companies and Financial Institutions
III. Loans to Commercial Banks in India
Non – funded assistance is provided in the form of guarantee in association with Indian commercial banks on behalf of Indian exporters/contractors in favour of overseas importers/employers and banks. These guarantees are in the form of bid bonds‚ advance payments and performance guarantees‚ retention money guarantees and guarantees for raising finance abroad.
Small and Medium Enterprises (SME) Finance
The importance of SME sector is well-recognized world over owing to its significant contribution in achieving various socio-economic objectives, such as employment generation, contribution to national output and exports, fostering new entrepreneurship and to provide depth to the industrial base of the economy.
India has a vibrant SME sector that plays an important role in sustaining economic growth, increasing trade, generating employment and creating new entrepreneurship in India.
The SMEs find the services of reputed national and international consultants as not cost effective and often, not adequately focused.
Recognising this knowledge gap, Exim Bank of India has been endeavouring to provide a suite of services to its SME clients.
These include providing business leads, handholding during the process of winning an export contract and thus assisting the generation of export business on success fee basis, countries/ sector information dissemination, capacity building in niche areas such as quality, safety, export marketing, etc. and financial advisory services such as loan syndication, etc.
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The globalization and post-WTO scenario offers considerable scope for exports of Indian agricultural products. Exim Bank has a dedicated Agri Business Group to cater to the financing needs of export oriented companies dealing in agricultural products.
Financial assistance is provided by way of term loans, pre-shipment/post-shipment credit, overseas buyers' credit, bulk import finance, guarantees etc. Term loans with varying maturities are provided for setting up processing facilities, expansion, modernization, purchase of equipment, import of equipment/technology, financing overseas joint ventures and acquisitions etc.
The Bank has strong linkages with other stakeholders in agri sector such as Ministry of Food Processing Industries, GOI, NABARD, APEDA, Small Farmers' Agri-Business Consortium (SFAC), National Horticultural Board etc. Apart from financing, the Bank also provides a range of advisory services to agri exporters.
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