EXIM FINANCE, SHIPPING & INSURANCE
UNIT III
EXIM BANK
Introduction: Export – Import Bank of India is the premier export finance institution in India,
established in 1982 under the Export – Import Bank of India act 1981. Since its inception,
EXIM Bank of India has been established a catalyst and a key player in the promotion of cross
border trade and investment. Commencing operations as a purveyor of export credit, like other
export credit agencies in the world, EXIM Bank India has, over the period, evolved into an
institution that plays a major role in import nearing Indian industries, particularly the small and
medium Enterprises in their Globalisation efforts, through a wide range of products and
services offered at all stages of the business cycle, starting from import of technology and
export product development to export production, export marketing, pre-shipment and post
shipment and overseas investment.
FUNCTIONS OF EXIM BANK
The EXIM Bank offers a range of financial products and series to Indian Exporter, Foreign
Buyers (importers) and to the Commercial Banks in India.
A) FINANCIAL PRODUCTS:
1. Buyer’s Credit
Buyer's Credit is a unique credit facility programme that motivates Indian exporters to explore
new geographies. Through this programme, the overseas buyer can open a "letter of credit" in
favour of the Indian exporter and can import goods and services from India on deferred
payment terms.
2. Corporate Banking:
It is a support provided to export-oriented units by catering to long-term loan requirements that
help exporters to finance new projects, expand, modernize or purchase new equipment or
carryout R&D; and cater to their working capital and overseas investment requirements.
3. Line of Credit:
They have been extending Line of Credit (LOC) to enable Indian exporters to enter new
geographies or expand their business in existing export markets without any payment risk from
overseas importer and put special emphasis on extending LOC as an effective market entry tool
as well as a means of market diversification for Indian exporters. Example: Credit card
4. Overseas Investment Finance:
This has enhanced export opportunities for India and driven the economic growth of the nation.
We have attempted to integrate foreign trade and investment opportunities to build value over
the long term
5. Project Exports:
In recent years, Indian project exporters have secured diverse contracts exemplifying their
versatility and technological capabilities. EXIM Bank is one of the prime supporters in
encouraging project exports from India; and has enabled Indian companies to secure contracts
across various geographies over two decades and supplement the development objectives of
host countries. This facility is extended by way of advance/credit against receivables from the
host countries (Project Importing Countries) on Deferred Payment Terms. It provide Pre-
shipment and post-shipment credit on Deferred Payment Terms to the Project Exporters.
B) SERVICES
1. Marketing Advisory Service:
EXIM Bank's Marketing Advisory Services (MAS) plays a promotional role to create and
enhance export capabilities and international competitiveness of Indian companies. It helps
Indian exporting firms in their globalisation efforts by proactively assisting in locating overseas
distributors/buyers/partners for their products/services and identifying opportunities overseas
for setting up plants or projects or for acquisition of overseas companies
2. Research& Analysis:
Research & Analysis Group (RAG) is a team of experienced economists and strategists who
steer the group with in-depth insights on international economics, trade and investment through
qualitative and quantitative research techniques. This research helps the Indian exporters to
explore the international market for their products.
3. Export Advisory Service:
The Export Advisory Services Group (EAS) offers a diverse range of information, advisory
and support services, which enable exporters to evaluate international risks, exploit export
opportunities and improve competitiveness. Value added information and support services are
provided to Indian projects exporters on the projects funded by multilateral agencies.
4. Other services
• Develop export market entry plans
• Facilitating accomplishment of international quality certification
• Display of products in trade fairs & exhibition
C) LENDING TO INDIAN BANKS
1) Export bills Re – discounting:
Commercial banks of India who are authorised to deal in foreign exchange can re-discount
their short term export bills with EXIM bank, for an unexpired usance period of not more than
90days.
2) Refinance of export credit:
Authorised dealers in foreign exchange can obtain form EXIM bank 100% refinance of
deferred payment loans extended for export of eligible Indian goods. Such credit enables
exporters to offer credit terms to foreign importers.
3) Syndication of export credit risks:
Commercial banks in participation with EXIM bank provide long term credit at competitive
rates of interest to Indian exporters of capital goods, turn key projects and consultancy services,
thereby enabling Indian exporters to compete effectively in the international market. The
facility of syndication of export credit risks lends flexibility to the export credit mechanism by
allowing bank to assume risks without blocking their funds for long terms.