CHAPTER-IV

The Export-Import
Bank Of India
(EXIM-BANK)
 67

4.1 ESTABLISHMENT OF THE EXIM-BANK

The export import bank of India was established in 1982. It is

designed and developed as an apex institution in India for financing
promotion and development of exports in the country.1 As an apex

centre for export incentive and infrastructure the Bank acts as a premier
institution for the promotion and development of export sector through
multifarious export promotion programmes and policies. The
significance of the institution lies in the continuous input that it provides
for the domestic exporters and overseas importers through its finance,
advisory and service incentive mechanism, the export promotion
incentives and infrastructure mechanism of the EXIM-BANK. to the Indian
exporters is a distinct ability which is rarely found in other export
promotion councils and centers.

Export import bank of India has earned national and international

recognition for its assistance to Indian, overseas importers and joint
ventured global banks, the export import bank of India provides more
than 50 variety programmers for Indian exporters, commercial banks,
and overseas importers the contents and the structure of export
promotion mechanism is considered to be the unique in their focus on
international business promotions.2

The Institute is rendering advisory and promotional services like

merchant banking service, export marketing service, advisory services
on multilateral agency funded projects overseas, project preparatory
service, overseas development assistance, consultancy and technological
 68

service trade finance overseas investment finance product liability

insurance programmed and export vendor development programmes.3

Since its inception the export import bank of India on a

continuous basis providing training research finance consultancy and
information services to both the Indian and overseas importers, which
has created a new option for EXIM-BANK in export promotion
mechanism.4

The overseas offices of the EXIM-BANK at Washington D.C.

Singapore, Milan in South Africa Budapest and Johannesburg are
strategically located for institutional linkages through World Bank,
International ftlpnctory fund, European $ank for ^-construction and
Jfevelopment, Asian development bank. The institution has financial

linkages with export credit agencies around the world. 31 countries

around the world through 53 cooperation segments have benefited the
banks incentives through memorandum of understanding.5

On deferred payments the bank extends finance to Indian

machinery manufactured goods, consultancy and technology service.
Through regional development agencies the bank finances through co­
financing projects to assist the Indian exporters to participate in
overseas projects Indian exporters jure avail of services like forfeiting
under writing of issues, import finance through lines of credit from
export credit agencies. Equity finance is available for acquiring
available market opportunities for manufacturing, marketing and other
services. Many Indian companies have benefited from the premier
 69

export promotion institute, with regard to export marketing and export

product development. EXIM-BANK is also extending the credit for
foreign Governments and agencies in developing countries through
buyer’s credit and lines of credit for overseas importers. The increasing
globalization of the world economy has embarked upon the export
import bank of India for acting as an export financing institution,
commercial export insurer, and a foreign investment catalyst in
promotion of Indian exports.

4.2 OBJECTIVES OF THE EXIM-BANK

The export import bank of India was established with the following
objectives.

1) To extend credit assistance to Indian exporters of machinery,

manufactured goods, consultancy, technology service and agro
based products.

2) To study prospects for Indian exports, commodity wise and

country wise and to suggest measures for acceleration of export
sector.

3) To undertake co-financing with global and regional development

agencies commercial banks export promotion councils and
organizations both at centre and state level to assist the exporters
in their efforts to take part in overseas projects.
 70

4) To provide information and advisory services to enable the

Indian exporters to evaluate the international risks, export
opportunities and competitiveness.

5) To analyse international market access for Indian exporters

through global marketing information.

6) To provide advice an international marketing and export data to

enable the domestic exporters for effective participation in
opportunities offered by global projects and M.N.C.s

7) To undertake research and analytical studies on specific industry

and sub sector, which are having export potential.

8) To extend financial credit for export contract bids overseas.

9) To identify the various weak links of Indian exporters and

offering them a permanent solution.

10) To create technical managerial, administrative and export quality

skills among the domestic exporters to strengthen them global
standards.

11) To translate national and foreign trade policies into concrete

actions points.
 71

12) To provide alternative financing solutions to the Indian

exporters, guiding him in his efforts to be internationally
competitive.

13) To develop mutually beneficial relationships with international

financial community.

14) .To initiate and participate in debates on issues related to India’s

international trade.

15) To forge close working relationships with other export

development and financing agencies multinational funding'
agencies and national trade investment promotion agencies.

16) To anticipate and absorb new developments in banking, export

financing, and information technology.

17) To be responsive to export problems of Indian exporters and

pursue policy resolutions.

18) To publish and establish literary sources through library and

other information sources to facilitate the study of various
subjects related to exports imports and foreign trade.

19) To invite global representatives who are interested in investing

Indian industries which are export oriented.
 72

20)To do all such other activities either along or in conjunction with

other organizations as the economy may consider necessary
incidentally or conductive to the objectives of the country.6

4.3 EXIM BANK AND THE STAFF

The EXIM-BANK is virtually a melting point of thriving minds

including academicians, form back grounds of banking, engineering
business management information technology, accountancy, economics
and liberal arts. The institution is an excellent body for underlying
7
passion and professional excellence.

4.4 CORPORATE PHILOSOPHY

The banks philosophy is mainly focused on people orientation and

customer focus. The bank mainly believes in its customers as they are a
key source. It develops its human resource by motivating through
challenging assignments, up grading their skills through training
programmes and recognizing professional excellence. The bank fallows
an officer oriented, non-hierarchical work culture with an open office
plan, facilitating for a free flow of interaction between and within
groups. Export import bank of India as a model corporate citizen
maintaining an equal ratio of men and women. Its high level office
automation lean and multi skilled staff enabled optimum efficiency and
profitability to the institution. Customer responsiveness is germane of
the banks philosophy. The bank is constant!}' seeking to innovate and
improve its products processes and delivery mechanisms to its
 73

customers. The interactive mode of analysis followed by the bank and

decision making through multidisciplinary cross functional groups has
enabled the bank to offer best possible help to its customers.

4.5 GLOBAL NET WORiqg^PHILOSOPHY

Export import bank of India is unique in its global and national

network of infrastructure to its customers. The banks five overseas
office branches at Budapest, Johannesburg Milan, Singapore and
Washington D.C. have forged India’s strategic linkages with the global
markets. The institution is working with four tier institutional
mechanism which includes.

1) Multilateral agencies including world Bank, Asian development

Bank and African development authority.

2) Export -credit agencies.

3) Trade and investment promotion agencies in India and abroad.

4) Trade and industry associations in India.8

4.6 DOMESTIC OFFICES OF THE BANK

With the view of help and responding to regional development

activities in the export sectoiy *hie export import bank of India has

established eight regional offices at Ahamadabad, Bangalore .Chennai,

 74

Hyderabad, Kolkata, Mumbai, New Delhi, and Pune. These regional

offices working for export promotion identify the special needs of
domestic exporters through a clause interaction, suggest and assists
innovative instruments in accordance to the regions potential. The bank
regularly interacts with commercial banks, financial institutions,
developmental agencies. Government organizations and enterprises to
strengthen the banks philosophy and infrastructural mechanism to meet
the needs of domestic export sector.9

4.7 ORGANISATIONAL SET-UP OF THE BANK

The export Import bank of India shall consist the following

organizational set-up.

I. At Government level

Board of Directors at Government level who includes

a) Secretary Dept ofcommerce and industry Government of India
b) Secretary, Economic delations, Ministry of'external affairs
c) Secretary Bankingldivision and the Ministry of finance.

II. From financial institutions

a) Executive director. Reserve Bank of India.

b) Chairman and managing Director, Industrialjevelopment Bank

Of India.
 75

c) Chairman and fc^magingjfirector, Export Credit Guarantee

Corporation of India.

III. From Commercial Banks

a) Chairmanjstate Bank of India.

b) Chairman and Whnaging Director-Canara Bank

c) Chairman and Managing Director Bank of Maharastra.

IV. Experts from Trade and Industry

a) Professor andjfean, faculty of economics Delhi School of

economics.

b) Chairman and management consultant, pan Asian management

foundation New Delhi.

c) Professor and Dean Faculty of management and business

administration, I.I.T. New Delhi.

d) Vice president, Asian association of agricultural engineering

pune.10
 76

48 EXIM-BANKSMAJORPROGRAMMESTOEXPORTERS

As contained in the memorandum of associations of the Export

Import bank of India, the major programmers of the bank include.

A FORMS OF DIRCT CREDIT ASSISTANCE FOR INDIAN

EXPORTERS

1) Pre shipment credit.

2) Post shipment credit.

3) Lines of credit to exporters.

4) Export suppliers credit (Production equipment finance)

5) Finance for consultancy and Technology service.

6) Foreign currency preshipment credit.

7) Finance for export oriented units and exports processing zones.

8) Foreign currency lines of credit for importers.

9) Credit assistance under African development project.

 77

10) Refinance of suppliers credit.

11) . Foreign currency lines of credit for Importers.

12) . Finance for Rupee expenditure for project export contract

guarantees.11

B. EXPORT PROMOTION SCHEMES FOR DOMESTIC

EXPORTERS THROUGH COMERCIAL BANKS

1. Refinance of export credit.

2. Export Bills Rediscounting facility.
3. Re lending term finance facility.
4. Re-finance of term loans to export oriented units.
5. Re -finance of term loans for computer soft ware exporters.
6. Small scale industry export bills re-discounting.
7. Bulk import finance.
8. Project finance.
9. Overseas investments finance.
10. Export marketing finance.
11. Export product development finance.
12. Finance for soft ware training institutes and technology parks.
13. Finance for minor ports development.
14. Working capital finance for exporters.
15. For faiting finance.12
 78

C EXPORT PROMOTION SERVICE SCHEMES OF EXIM

BANK.

1. Project preparatory service overseas.

2. Business advisory and technical assistance service overseas.

3. International merchant Banking service.

4. Export marketing information service.

5. Advisory service on multilateral agency funded projects

(MFPO).

6. Information on establishment of joint ventures facilitation.

7. Product liability insurance programme.13

D. EXPORT PROMOTION PROGRAMMES

1. Promotion of Indian consultancy through Africa project

development programme.
2. New package programmes for financing software product
development.
3. Export marketing and quality certification.
4. New facility for Indian consultancy in Africa.
5. Land mark Rupee Guarantee loan.
6. Agri- business cell.
7. Institutional linkages planning and Research.14
 79

A FORMS OF DIRECT CREDIT ASSISTANCE TO INDIAN

EXPORTERS

4.8.1 PRE-SHIPMENT CREDIT

This enable the Indian exporters in buying raw materials other

inputs, required in conversion of resources into export potential
products. The exporters executing export contracts with a time
exceeding not more than six months are avail of this incentive.
Exporters of construction turnkey projects are also avail of this benefit
with a provision of rupee mobilization expense. This term avail under
short term contracts are applicable even under pre shipment credit.
Many a times this line of credit mechanism is available for Indian
companies which have undergone of one export contract for capital
goods and finance to produce the goods which entails a production
period of not less than six months this facility is also extended for
financing temporary export contracts in terms of foreign currency to
finance of imported inputs required in production of export potential.

Between 1988-89. The sanctions and disbursements of

reshipment production credit amounted to Rs. 112.6 and 95.9 crores.
During 1989-90 it was 23.7 and 24.3 crores. For the year 1991 92 it was
90.7 and 89.2 crores and during 1992-93 it was 79.9 crores and 70.5
crores the year 1993-94 amounts to 82.5 and 76.4 crores with 90.4 and
83.2 crores during 1994 and 1995.,s
 80

4.8.2 POST SHIPMENT CREDIT

The deferred payment contract of an exporter, with a contract

value. Excluding the advance payment received by him for more than
five years is a severe burden on the exporters finance. With the
objective of relieving the exporter from burden and to assist the exporter
with a set of incentives the export import bank of India through reserve
Bank of India, authorized the commercial banks to extend the exporters
a post shipment credit referred as “Term export credit” this Facility is a
granted by the export import bank of India for Indian exporters for
preparing the eligible export potential goods. The rate of interest is
determined by the exim-BANK on the basis of structure and duration of
the loan. 100% finance to the exporter is available on the certificate
performance and order based method of export potential. Under order
based method alone, exporter is avail of 80% of export order. The
minimum amount of export order for financing is R M 12,500,00 and
minimum amount of financing is RM 10,000.00 This credit facility is
low interest rated and highly competitive in export financing.16

4.8.3 LINES OF CREDIT TO EXPORTERS

Under lines of credit to exporters scheme, Besides foreign

governments finance is extended for foreign financial institutions and
government agencies to on lend in the respective country for
importation of goods and services from India. This scheme offers a long
term finance for overseas financial institutions and agencies for trade of
 81

capital goods and related services. Foreign governments and financial

institutions are directly eligible for this term finance in importation of
Indian goods and related services.17

4.8.4 EXPORT SUPPLIERS CREDIT

Export suppliers credit assisted by the export import bank of India

enables the Indian exporters to extend term credit assistance to overseas
importers of eligible Indian goods. Between 1988-89 the total sanctions
and disbursements of export suppliers credit has amounted to Rs 128.2
and 111.8 crores, During 1989-90 it was 155.3 and 123.5 crores. The
year 1990-91 amounted to 185.0 and 129.4 crores between 1991-92 it
was amounted to 58.5 and 97.5 crores. The period 1992-93 amounted to
156.4 and 108.4 crores for the year 1993-94 and 1994-95 it was 187.4,
121.4 and 196.3 and 135.2 crores. Lines of credit to exporters.

This facility is extended to commercial banks, financial

institutions, regional development banks and other overseas entities for
providing non recourse financing option to Indian exporters. SMEs are
the major beneficiary of this credit facility. Export import bank of India
is renewing its focus on trade through lines of credit assistance to
exporters. The bank has sanctioned 95.0 M.N.,U.S $ for the year 2000-
2001 for augmenting exports of goods and services form India. The
countries benefited from the scheme includes Banco-Bradeseo (Brazil)
Banco Cent Americano de-integration economic covering El Salvador,
Guatemala, Honduras, Banco-de-commercio exterior de
Colombia(Colombia) Banco- Industrial devenezuela (Venezuela) export
 82

Import bank of Mexico (Mexico) Bank of Markazi, Jomhauri Islami

Iran (Iran) Eastern and southern African trade and development Bank
covering 16 countries in Africa). The financial institutions of these
countries are specialized export promotion institutions like export
Import bank of India. The Reserve bank of India through export import
bank of India has enabled a strong export base for Indian exporters
under this lines of credit the goods which are permissible to export
under Government of India’s export import policy are being included
under this scheme. Particularly lines of credit has become effective
market entry support for SMEs. Exim -Bank is in discussion with Latin
American countries including Mexico Brazil Colombia Bolivia,
Ecuador, Pern, Renezuela to increase LOC’S to these regions for
importing capital and tern key exports form India.

4.8.5 FINANCE FOR CONSULTANCY AND TECHNOLOGY SERVICE

The export import bank of India under this scheme of assistance

provides credit assistances to eligible Indian exporters exporting of
consultancy and technology services to over seas entities for extending
term credit on imports. India’s has a very great export potential in
consultancy services which are having spin off benefits. The export
import bank of India with the goal of promoting Indian consultancy
projects overseas, has underwent an agreement with International
financial corporation Washington, with which Indian consultants are
well market accessed short term assignments in Africa. Caribbean,
Central America. South Pacific Poland, Mekong Delta and other
regions. The funding fees for professional consultants from India is
 83

funded by EXIM-BANK of India. IFC Washington provides foreign

exchange assistance for Indian consultancy for meeting other costs such
as travel lodging, boarding. The recent terms of EXIM-BANK has
increased the payable fee to Indian consultants on the basis of
assignment days from 110 to 180 days. This renewied package system
from EXIM-BANK has motivated the Indian consultants for taking up
overseas assignments. 40 assignments have been undertaken by the
Indian companies under this programme from the countries of Africa
Vietnam, Poland Mauritius. The major areas of the consultancy field
includes oil and soaps, leather, shoes, textiles, financial accounting and
MIS, soft ware development.

4.8.6 NEW FACILITY FOR INDIAN CONSULTANCY IN

AFRICA.
During the year 2000-01 the EXIM-BANK of India has under went
an agreement with Africa based P.T.A. Bank of Nairobi for importing
Indian consultancy projects in PTA financial projects of Africa.
Preferential trade area bank is a regional development bank with 100%
finance to eastern and South African region termed as comas. Many
Indian consultants have gained market access for their consultancy
service through technology, machinery, turn key projects. After 2001
the EXIM-BANK has reviewed its policy mechanism through PTA
bank covering the fields of Parma cuticles, plastics, steel rolling,
textiles, financial services. According to Indian capabilities the EXIM-

bank support has catalysed exports from India to COMESA through

lines of credit suppliers’ credit, for failing equity finance for joint
ventures in other Global countries.19
 84

4.8.7 FOREIGN CURRENCY PRE-SHIPMENT CREDIT

Foreign currency pre shipment credit assisted by export import

bank of India enable the exporters of Indian economy for accessing
finance from commercial banks for importation of raw materials and
other inputs for production of export potential products. Short term
foreign currency finance is available for Indian exports for procurement
of export oriented production.20 The credit of finance under this scheme

is re-payable in foreign currency from proceeds of the relative exports.

Foreign currency pre-shipment credit represents an additional credit
source to the Indian exporter in enlarging his export volumes.
Manufactured goods and value added goods are the base for this
assistance. The significance of the scheme lies in elimination of two
way exchange conversion costs and exchange risks, by enhancing the
export competitiveness foreign currency pre shipment credit is a cost
effective credit when compared to rupee export credit and overseas
suppliers credit loans availed from export import bank of India to
commercial banks are exempted from cash reserve ratio, statutory
liquidity ratio and incremental credit deposit ratio requirements.

Exporters of electronic goods, capital goods and commercial

banks, involved in on lending for export customers are the major
beneficiaries. Interest rates are charged on par with, London inter bank
offer rates. Repayment period extends up to 180 days from the date of
disbursement .2I
 85

4.8.8 FINANCE FOR EXPORT ORIENTED UMTS AND EXPORT

PROCESSING ZONES

For availing this credit assistance, the EXIM-BANK defines an

export oriented company as any company with a minimum export
orientation of 10% of net sales or annual export sales of Rs.5 crores,
which ever is lesser. The export import bank of India extends term loans
or deferred payment guarantees to 100% export oriented units, units in
free trade zones and computer soft ware exporters units importing
capital goods under export promotion capital goods scheme. Units
undertaking expansion, modernization, up gradation are also eligible
under this scheme. The bank extends term loans in Indian rupee, foreign
currency and also deferred payment Guarantee on importation of capital
goods. Banks cost of funds on foreign currency term loan is the base for
fixing rate of interest. One percent of the loan is payable to the EX1M -
BANK as service fee. Depending upon the projected cash flows re
payments time period for the loan extends up to 10 years. Any
acceptable security in addition to the project asset is considered as a
security for sanctioning loan. Preliminary discussions with export
promotion companies is the base for credit assistance under this
programmed.22

4.8.9 FOREIGN CURRENCY LINES OF CREDIT FOR

IMPORTERS
The eligible importers of export potential commodities from
India gets this assistance of foreign currency lines of credit from export
 86

import bank of India. The finance enable the Indian importers in buying
export production inputs as raw materials, components, machinery and
related inputs. The credit is repayed in foreign currency from the
proceeds of relative exports. Domestic exporters are very much assisted
by this FCPC in expansion of export volumes. Foreign currency lines of
credit is much cost effective than rupee export credit and over seas
suppliers credit.

4.8.10 CREDIT ASSISTANCE UNDER AFRICAN DEVELOPMENT

PROJECT

The African development bank international finance corporation

and United Nations development programme jointly sponsors the Africa
development project. 14 industrially advanced countries have supported
the programme through direct funding assistance. The Africa
development project scheme mainly aims at identification, construction
of viable projects in re developing depressed regions of Africa. Export
import bank of India on behalf of Government of India and has
underwent an agreement with Africa development project bank, where
by the EXIM-BANK providing the services of Indian consultants and
technocrats in rebuilding Africa. Grant financing provided by EXIM-

BANK has availed the Indian exporters in undertaking specific

assignments in sub Sahara and African regions.23

On may 22nd 1999 export import bank of India and Africa

development bank have jointly signed an agreement at Cairo in Egypt in
co financing projects at Africa. Priority considerations have been given
 87

for projects of small and medium enterprise. The project operations also
includes exchange of information publications regarding business and
foreign direct investments, logistic support of officials visiting each
other for field survey, organizing work shops and symposium. Focus on
co-financing projects has resulted in establishment of 27 projects for the
current year 1998-99 the scheme of Africa development project
assistance considerably mitigated cross border and payment risks
associated with project exports. 53 regional member counters of AFDS
have been benefited from this AFDB and EXIM-BANK joint scheme.24

The sphere of trade promoting activates in Africa and sub-

Saharan regions, export import bank of India extends lines of credit to
banks, financial institutions, Government agencies in those regions,
countries like Algeria, maturations Uganda, Tanzania, Ghana, Kenya
are some of the important beneficiaries from this scheme.25 Even SMEs

in private sector of Africa have been assisted by Indian consultants

through international finance corporation. Export import bank of India
short lists the exporting companies for undertaking project in the Africa
regions and the entire exporting expenditures of the companies will be
met by EXIM-BANK.

4.8.11 RE-FINANCE OF SUPPLIERS CREDIT

The eligible exporters of India gets this assistance from export

import bank of India and the over seas importers gets term credit over
180 days from Indian exporters. Under this scheme the commercial
banks in India eligible for dealing in foreign exchange gets 100%
 88

refinance of term loans from Exim-Bank for supporting re-finance for

Indian exporters. Exporters of eligible commodities form India as per
the EXIM-BANK terms gets the credit assistance. Under this scheme.
Exporting deal between domestic exporter and overseas importer an
credit terms takes place for a duration of 30 days.26

4.8.12 FOREIGN CURRENCY LINES OF CREDIT FOR

IMPORTERS
All the export potential eligible exporters from India get this
foreign currency lines of credit from export import bank of India for
acquiring imported machinery, raw material, related products required
in export production. Recent policies of the EXIM-BANK has changed its
priority for sanctioning credit for importing machinery and
technological know-how. Preferably EXIM-BANK finances under this
programme which are export related even importation of canalized
items and consumable goods are eligible for finance under this scheme.
The export import bank issue a letter of commitment to exporter’s on
request from commercial banks.

B. EXPORT PROMOTION PROGRAMMES FOR

DOMESTICCXPORTERS THROUGH COMMERCIAL
BANKS

Export Import bank of India in association with nationalized

commercial banks in India offers multifarious export promotion
programmes for Indian exporters. Through EXIM-BANK of India
commercial banks in the country have become the source of medium
 89

and short-term credit, ranges form 150 and 180 days. The Re
discounting facility of EXIM-BANK to the commercial banks has availed
the commercial banks for re-discounting export bills of small scale
industries customers with not exceeding 90 days. Commercial banks are
also availing the benefit of re-finance of supplier’s credit, with which
commercial banks offer credit to Indian exporting companies of eligible
goods. The beneficiaries of this credit from the commercial banks in
turn offers term credit over 180 days to overseas Imports. The following
export promotion programmers from the commercial banks funded by
export import bank of India are availed for Indian exporters and
overseas importers.27

4.8.13 REFINANCE OF EXPORT CREDIT

Export -Import bank of India extends re finance of export credit

to Indian commercial banks. Commercial banks in term offers credit to
Indian exporters of eligible goods who extends term credit to overseas
importers covering a period of 180 days. Along with commercial banks
authorized dealers in foreign exchange from India are availed for this
benefit from export import bank of India. Indian exporters are eligible
for hundred percent re finance on deferred payments re finance on
deferred payments. Under this facility, no minimum or maximum limit
is fixed under this scheme. Contracts which are of high value EXIM -

BANK extend post shipment credit directly to the exporters through

commercial banks. Contracts which are of medium value say 5 crores ,
commercial banks them selves extends post shipment credit to the
exporter with a 100% re finance facility from EXIM-BANK of India.2’’
4.8.14 EXPORT BILLS RE DISCOUNTING FACILITY

Export bills re discounting facility of EXIM-BANK to Indian

commercial banks enable commercial banks to rediscount export bills
with a due period of not exceeding 180 days. Rate interest charged by
EXIM-BANK ranges from 12 to 16% per annum. The bank introduced a
variant programme of export bills re discounting (SSI) during 1985,
under which export bills of small scale sector alone are eligible for re
discounting. The consideration of the single of the export bills-port-
folio, of commercial banks, the EXIM-BANK avails this facility, the
submission of the written request and an undertaking confirming the
holding of export bills in respect of which the facility is sought,
commercial banks avails this facility. The re-payment period for the
commercial banks on loans availed form EXIM-BANK depends upon the
due dates of export bills. If the realization of the bill is before maturity
date, Commercial banks are expected to re-pay the entire proceeds of
the EXIM-BANK with subject to the availability of limit. Banks substitute
such bills with other bills; the whole process of credit transformation
between EXIM-BANK and commercial banks is much simplified.

4.8.15 RE-LENDING TERM FINANCE FACILITY

With re-lending term finance facility banks over seas, extends

term fiance to their clients for importation of a eligible Indian goods.
The EXIM-BANK of India the foreign buyer and the supplier from India
are availed of this service form over seas banks.29
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4.8.16 RE FINANCE OF TERM LOANS FOR EXPORT

ORIENTED UNITS

Re-finance of term loans for export oriented units in India from

exim-bank of India enables the commercial banks to offer credit for
eligible exporters, export oriented units for acquiring indigenous and
imported machinery and other related assets for export production.
exim-bank re-finances full amount to the computer soft ware exporters
granted by commercial banks. Commercial banks are the authorized
dealers in foreign exchange acts as negotiating banks in a line of
credit.30

4.8.17 RE-FINANCE OF TERM LOANS FOR COMPUTER

SOFTWARE EXPORTERS.

Acquisition of imported and indigenous computer systems and

project related assets are possible under this programme. The software
policy from the Government of India announced during 1986 has
considered EXIM-BANK as designated agency for facilitating, clearance
and providing foreign exchange for importation of computer software
systems for software exporters who are with 350% export obligation.
EXIM-BANK of India offers foreign exchange clearance and finances
under single umbrella, after monitoring the software export proposal,
50% of rebate is being provided as software exports on customs duty
payable as Imported software systems. Eligible exporters of software
packages from India are availed of this assistance directly, by way of
 92

rupee and foreign currency term loans and as a re-finance to commercial

banks in respect of rupee term loans extended by them for software. A
spread of 2% per annum in allowed is case of re-finance, in favor of
lending banks, subjected to their lending rates to exporters,
organizations and companies engaged in exportation of software
exports/selling up an export oriented software company are eligible for
assistance under this scheme. With the furnishing of information on
marketing arrangements, financial, technical and commercial viability
of the projects for which finance is needed by the exporters in their
proposals are eligible for this service. Programming service contracts,
man power exports, applications development contracts with systems
analysis and design, turn key systems involving total hardware and
software solutions get’s top priority under this assistance programme.
Software exporters are much benefited for obtaining product, process
certification, export marketing and even for export product
development.31

4.8.18 BULK IMPORT FINANCE

Export import bank of India provides import finance of high

amounts for Indian importers who in turn imports bulk import of
consumable inputs. With bulk import finance high degree exporting
companies, imports large volumes of imported commodities for
manufactory export potential goods. Volume of credit under the scheme
extends up to rupees one crore. Beneficiaries are availed of loans either
in rupee terms or foreign currency rate of interest as import finance
loans is minimum fixed by EXIM-BANK of India. Exporters who are
 93

availed of this loan are having the time period of repayment up to one
year. Eligibility assets pledged for bank stands as security for loan.
Normal procedure of extending the loan is determined by the
preliminary discussions of EX1M-BANK with exporters.

4.8.19 V ROJECT FINANCE

The project finance assistance of EX1M-BANK includes funded

and non funded facilities for overseas industrial turnkey projects, civil
construction contracts as well as technical and consultancy service
projects. Turn key projects includes supply of equipment along with
related services, like design, detailed engineering, civil construction,
erection and commissioning of plant chemicals, textiles, sugar, cement
and commissioning of boilers are also included. Construction projects
involves civil works, steel structural works, supply of construction
material and equipment. Typical projects includes civil works for roads,
railway lines, air ports, irrigation canals dams and buildings.32

exim-bank provides two types of assistance for project exporters

which includes funded assistance and Non funded assistance.

4.8.20 NON FUNDED ASSISTANCE

* Bid-bond :

EXiM-BANK issues bid bond for the domestic exporters for a

maximum period of six-months. In case contract is not secured, EXIM-

BANK re-funds 75% commission to the original customer.

 94

ADVANCE PAYMENT GUARANTEE

Project exporters from India gets advance of 10 to 20% of the

contract value as mobilization advance, which is generally recovered as
a pro-rata basis from the progress payments during project execution.33

PERFORMANCE GUARANTEE

Exim-bank issues performance guarantee of 5 to 10% of

contract value until the completion of maintenance period or until the
grant of final acceptance certificate 34

* GUARANTEE FOR RELEASE OF RETENTION MONEY

With the guarantee for releasing of retention of money the

exporters gets the contract payments without any retention by the
client.31*

w GUARANTEE FOR RAISING BORROWINGS OVERS SEAS

Exim-bank assists the bridging finance to the project exporters

at the earlier phases of the contract for supplementing the mobilization
advance up to 10% of the contract value may be raised in foreign
currency through a foreign bank against this guarantee.36
 95

* GUARANTEE COMMISSION

Guarantee commission is charged on exporters on the basis of

stipulated rates decided by foreign exchange dealers association in
India. Commercial banks in India issues guarantee to exporters in
association with EXIM-BANK of India.

* FUNDED ASSISTANCE

Under the funded assistance pre-shipment rupee credit is

extended for temporary funding to project exporters. Producers are also
avail of pre-shipment credit in foreign exchange for financing export
contracts. Majority of exporters gets the pre-shipment credit in terms of
foreign exchange for financing the cost of imported inputs.37

* FOREIGN CURRECNY LOAN

Eligible exporters in India gets this service of foreign currency

loan at competitive rates to finance and purchase of third country
material and normal construction machinery. These facilities are
extended by EXIM-BANK individually or in participation with
commercial banks.38

* FOREIGN CURRENCY EXPORT CREDIT

Exim-bank makes an arrangement with overseas export credit

agencies on the basis of origin of imports, and currency of re payment
 96

under an export contract rate of interest and terms of the bank are
always subjected to change.

All the eligible exporters from India gets the facilities like
remittance of foreign exchange from India for meeting initial expenses,
inter-project transfer of funds and for opening accounts in overseas
banks, and also for payment of agency commission, during the project
processing period construction companies and firms from India
normally uses Indian construction material only. If there is any
mismatch of Indian equipment. The companies are eligible to procure
construction equipment from the countries where projects are processed,
on hire basis against payment of hire charges out of the foreign currency
payments received under the contract. As a case to case basis the
contractors are also permitted for importation of machinery from a third
country. Subjected to the specific approval of reserve bank of India
exchange control department. Indian equipments used in the contract,
can be given as hire after completion of the construction contract to the
other companies or over seas companies.

* PAYMENT MECHANISM FOR THIRD COUNTRY

PURCHASE

Along with the exports from India, execution of contracts

overseas requires procurement of third country goods and also purchase
of material in the country where project contract is executed. Payments
for such third country purchases are made through overseas buyer, or
through overdraft unit in overseas bank accounts. Letter of credit by
 97

exporter’s with the availability of adequate secure from buyer and

machinery terms.

Exporters of spares of certain Indian equipments for free re­

placements requires no license with the value of the spares not
exceeding 2.5% of FOB value.

* TEMPORARY CASH FLOW DEFICITS FOR PROJECT

EXPORTER

Projects started by the exporters overseas are financed by export

import bank of India through foreign currency. After the approval of
RBI exim-bank extends remittances to exporters on re-partition basis.
This takes place on the basis of recommendations of the delegated
authority on clearing proposal. Some times temporary cash adjustments
can be met in the 3rd country or the country in which project is

exempted against appropriate guarantee from exporters sponsoring

bank. Such type of additional finance would not exceed 15% of total
contract value.39

* INTER PROJECT TRANSFER OF FUNDS

Inter project transfer of funds are possible for an exporter who

has under taken more than one project, simultaneously overseas. It is
economical for the exporter during project construction and completion
period. Reserve bank of India considers approval of funds up to 1 lakh
 98

for inter project transfer and beyond this limit specific approval of
working group is necessary. 40

* OVER SEAS INVESTMENT FINANCE

Over seas investment finance is available from export-import

bank of India for overseas joint ventures wholly owned or subsidiaries
by the Indian companies. The major goal of this scheme is promoting
the Indian projects overseas. Indian exporters who are making equity
investment in an existing company or any project overseas with the
approval of reserve bank of India or government of India or concerned
authorities are the eligible beneficiaries of this assistance. Reserve bank
of India automatically approves the companies, which submits proposals
for joint ventures abroad or overseas. The government guidelines
restrict the overseas investment finance on terms that the total value of
the investment by the Indian company should not exceed 15 million U.S
$ is in the regions of SAARC countries. It is permitted up to 30 million
$ in the region of Myanmar and up to 120 crores in Nepal, Bhutan and
other areas.41

If the investment proposals are above 15 million U.S $, the

excess resources are raised through A.O.R resource, the exporter is
allowed to invest overseas joint ventures, with the approval of the
government of India. Indian companies are allowed to invest equity in
overseas joint ventures by the way of capitalization of export proceeds
of plant and machinery, technical know how free royalty and forex
remittance of equity contribution.
 99

Overseas investment finance is provided in terms of rupee term

loans to Indian exporters and companies for financing their eqity
investment overseas. Loans are also available in rupee terms for on
lending their overseas joint ventures, wholly owned or subsidiaries.
Even exporters have been provided guarantee for raising finance
overseas for equity investment and for working capital requirements for
♦ . 42
overseas joint ventures.

Regarding the rate of interest on overseas finance, rupee loans

are linked to banks minimum lending rate foreign currency loans
depends upon fixed or floating rates based on bank’s cost of funds. Even
interest is payable on reducing balances at half yearly rates.

Exim-bank of India provides 100% re-finance to commercial

banks in respect of rupee loans extended to the Indian promoter
companies for equity contribution in overseas.

EXPORT MARKETING FINANCE

Under the lending programme for export marketing finance, the

bank extends financial assistance to domestic exporters to create and
enhance export capabilities and international competitiveness of Indian
companies. Government of India has designed EXIM-BANK as the agency
 100

to manage the export marketing fund. Export marketing finance is of 3

types.
EMF-1

EMF-2

EMF-3

EMF-1:
Is a world bank loan to India for the exportation of industrial and
engineering goods.

EMF-2:
Is also a world bank loan for export development , which is
created in the height of E M F -1.

EMF-3: .
Has been created by EXIM-BANK from its own resources. All the
three programmes aim at accelerating export growth of targeted
products with global markets.43

ELIGIBLE USERS OF EMF SUPPORT

Companies who have strategic international marketing plan,

companies which have established presence, in the domestic market,
companies which are having satisfactory financial assets from private
and joint sectors are eligible for this support, activities like desk or field
 101

research, minor product adaptation, overseas travel and training quality

certification, product launch, investment in machinery equipment are
the major beneficiary programmes under this scheme.

* QUANTUM OF FINANCE UNDER EMF

Under export marketing fiance up to 50% of the cost of eligible

activities are covered by this programme. Remaining 50% is expected to
borne by Indian companies up to rupees six crores are available under
export marketing finance -3 for the activities which have been not
covered by EMF-land EMF -2.The rate of interest is 15% of the total
asset capital, valued rupees 50 lakhs is the maximum grant available to
the exporter under export marketing finance-3. The rupee loan under the
same scheme is made available up to rupees 6 crores. Cost of
expenditure like, consultancy and advisory expenditure, product
adaptation, testing and marketing launch cost falls under this scheme.
Costs like hardware and equipments costs, expenditure on tooling and
finishing are excluded form this.

EXPORT PRODUCT DEVELOPMENT PROGRAMME

With the idea of support and systematic export product

development plan, the export import bank of India has introduced export
product development programme. The programme mainly aims at
development of export potential products with a focus on industrialized
markets, companies which are working with product development plans,
 102

companies which are having established track records and finances are
eligible for assistance under this programme. Activities of such as
product design, research and development activities including cost of
manufacture of prototypes, development of tooling, tigs, fixtures,
process development costs and costs of product launching are availed of
benefits from this programme. Rate of interest depends upon cost to cost
basis. The re-payment period of the loan ranges from 5 to 7 years. Any
fixed assets of the borrower or security as may be considered
appropriate on term basis will be treated as the major security at the
time of loan sanctioning by the export import bank of India.44

* FINANCE FOR SOFTWARE INSmTUITIONS AND TECHNOLOGY

EXPORT AND ESTABLISHMENT

Financing of software industries, technology parks and export

establishments, through which, export import bank of India mainly aims
at expansion and establishment of software exports from India.
Exporting industries, companies and establishments which are having
good export track record and sound financial set up are eligible for
credit assistance under this scheme. The major activities eligible for
credit assistance under this scheme are acquisition of software parks,
lands, buildings software related equipments and the activities agreed by
the EXIM-BANK. Loans are issued in terms of Indian rupee and foreign
currency depending upon requirements. Floating rates on rupees loans
and fixed rates on foreign currency loans are charged on the term basis
of semi-annually or on reducing balances. ExiM-BANK charges 1% of
finance as service charge on total loan amount.45 sanctioned repayment
 103

period of the loan depends upon nature and structure of the project upon
which period is extended up to 5 -7 to 10 years.

FINANCE FOR MINOR PORTS DEVELOPMENT

Indian companies and corporates are being provided by the

export import bank of India, a term finance and non funded facilities for
enhancing port development. Development of minor ports related to
export infrastructural activities is the main goal of this programme.
Developments of minor ports are the basic necessary for enhancing
Indian exports to international markets.

Indian factories, corporate enterprises, export oriented

organizations are the major beneficiaries from this scheme, cargo
handling and storage, dry locks, ship breaking activities are very much
encouraged. Repayment period of the loan ranges from 7 to 8 years.
Loan sanctioning depends upon the security pertaining to proposed
company or assets belonging to proposed corporate guarantee. After
preliminary discussions with company, personal and corporate
guarantees loan being sanctioned.46

WORKING CAPITAL FINANCE FOR EXPORTERS

Export capabilities of the domestic companies is being enhanced

by working capital finance programme of the export import bank of
India. The requirements of the exporting companies are met by the
EXIM-BANK which ranges from 1 to 5 years. Units setup in export
 104

processing, zones units under the 100% export oriented scheme, units
importing capital goods under export promotion capital goods scheme,
units undertaking expansions / modernization, up gradation/
diversification progammes of existing export oriented units with export
orientation of 10% of sales or export sales of Rs.5 crores per annum
etc., are the major eligible companies benefited under this scheme.
Beneficiaries of the loan are availed up to 80% of the demand loan
component of working capital with a minimum of 20% margin. Interest
rates on loan are payable at floating or fixed interest rates, semi annually
on reducing balances. Long term working capital finance is also
available from export-import bank of India for the export oriented units
*

with installed capacity of above 5 crores. Loan facility have been

provided in terms of both foreign currency and Indian rupee. 1% of
service fee is being charged by exim-bank on total sanctioned loan
amount. Repayment period of the long term working capital finance
ranges from 1 to 5 years total fixed asset of the company, personal
guarantees of promoter directors / corporate guarantee of the group
companies, marketable securities of the companies are the major
securities for loan avail 47

* FOR-FAITING FINANCING A NEW FINANCE OPTION FOR

INDIAN EXPORTERS

For faiting is a new mechanism of financing Indian exports

introduced by EXIM-BANK of India, surrender of rights is the meaning of
a French word ‘forfait’ From which exim-banks mechanism of
forfeiting is being derived. The exporter surrenders, without recourse to
 105

him, his rights to claim for payment on goods delivered to an importer

in return for immediate cash payment from a forfeiter. Which means
non recourse discounting of export receivables. The for faiting
mechanism enables the exporter in India for converting credit sale in to
cash sale with no recourse to the exporter through export import bank of
India.43

All exports of capital goods and other goods made on medium to

long term credit are eligible for financing under this scheme. Exim-
BANK forfaites receivables under a deferred payment contract of export
of goods, evidenced by bills of exchange or promissory notes. Exporter
endorsed the bills of exchange or promissory notes, baked by co­
acceptance from a buyers bank, without re-course in favor of the far
faiting agency for discounting cash proceeds. Avalisation is the
common term used for banks acceptance. Transitions under the scheme
takes place only when for faiting accepts the co-accepting bank of the
importer.

Exporters request for an export transaction eligible for failing is

being considered by the EXIM-BANK through indicative and firm for
failing quotations for discount sale, commitment and fees form overseas
agencies. All the received bills of exchange or promissory notes are
being sent by the exim-bank for faiter, who in return remittance the cash
to the Indian exporters account after discounting the necessary
transaction fee.
 106

Under this transaction EXIM-BANK issues appropriate certificates

for all the eligible Indian exporters for remitting commitment fee and
other charges. Reserve banks of India under vide AD (GP series)
circular No.3 dated 13-1992 has been authorized the exim bank of India
for facilitating export financing through for failing.

* OPERATING COST OF FOR-FAITING MECHANISM

Three important cost elements have been involved in for failing

transactions.

> Commitment fee

> Discount fee

> Documentation fee

A. Commitment fee:

Exporter pays a commitment fee to the forfeiter for executing

specific for failing transactions at a firm discount rate within a specified
period of one year.

B. Discount fee:

Exporter pays interest cost in terms of discount fee for the entire
period of credit transaction, and the same is deducted by the forfeiter
from the account of exporter, against the available promissory notes or
 107

bills of exchange. Discount fee is computed on the basis of relevant

market interest rates reflected by the London inter bank offered
(L.I.B.O.R) for the credit period and the currency involved, plus risk
assumed by the forfeiter.

C. Documentation fee:

Straight forward for fait transactions involves no documentation

fee. A documentations fee is charged on extensive transactions, and
legal work process.

* Benefits accrued to the exporter from for FAITING

a) Domestic exporter improves liquidity and cash flow by

converting deferred payment export in to cash transaction.

b) Exporter because free from cross border political and commercial

risks associated with export receivable.

c) Domestic exporter benefits up to 100% of export finance as

compared to 80-85% finance being available from conventional
export credit progammes.

d) For failing facility does not impact the exporter’s borrowing

limits without a re-course on finance to exporter. For failing
represents an additional source of cash funding.
 108

e) For faiting facility enables the domestic exporter to be free from

credit administration and collection problems.

f) Exporter saves insurance benefit as for faiting obviates the need

for export credit insurance.

Export transactions under the for faiting scheme are being

considered, by the export-import bank of India on for fait quotation by
the bank. The acceptance of the quotation of a particular country
depends up on for faiting agencies, perception of risk quality and
transaction commitment towards a third country.

* Documents required for exim-bank under the Scheme

> Name and address of the foreign buyer.

> Country to which exports are to be sent
> Name of the guarantor bank from the foreign country.
> Nature of goods to be exported.
> Order form and quantity required
> Net amount of order- base-price and interest rate.
> Delivery period and repayment schedule.
> Name of the authorized dealer who handles the export transaction
for domestic exporter in India.
 109

C. EXPORT PROMOTION SERVICE SCHEMES

OF THE EXIM-BANK.

4.8.21 PROJECT PREPARATORY SERVICE OVER SEAS

Project preparatory service overseas programme has been

introduced by the export import bank of India for providing grant
finance for using Indian consulting inputs at preparatory stages of
project services overseas. The programme was designed by the exim-
bank for supporting studies covering pre-investment, project
formulation and project implementation. Loan available under this
scheme limits to Rs.20 lakhs for individual case and 10 lakhs as a
grant.49

Overseas government organizations, institutions, multilateral

institutions, Indian exporters are the eligible entities for P.P.S.O finance.

4.8.22 BUSINESS ADVISORY AND TECHNICAL

SERVICES OVERSEAS

Business advisory and technical service overseas is a sequel

arrangement to the Africa development program,. Being introduced by
the EXIM-BANK. Under this programme, the cari bean and central
American authorized, south pacific authorities, and polish business
development authority. Are assisted by Indian technological firms for
offering technical and managerial assignments. Assignments comprise
pre-feasibility studies. This programme of the export import bank of
 110

India has established a link between European economic community

en
and Indian trade.'

4.8.23 INTERACTIONAL MERCHANT BANKING

SERVICE

International merchant banking service programme was

introduced by export import bank of India with the two objectives of
foreign currency financing and advisory services for evolving optimum
financial packages from Indian companies to overseas projects IMB
desk realized foreign currency resources for exim-bank for on lending to
Indian project exporters for meeting non rupee cost of overseas projects.
With the approval of working group on export finance international
merchant banking desk raised foreign currency resources for exim-bank
for an lending to Indian exporters for meeting non-rupee cost of
overseas projects against 35% export obligation. Software exporting
companies are eligible to get foreign currency loans which are being
translated as comparative cost. Besides providing foreign currency loan
international merchant banking desk is also equipped in providing credit
for Indian exporters.

Indian companies submit bids for overseas contractors with the

approval of working group on export finance. The loans sanctioned for
Indian companies are examined by the appropriate authority of exim
bank. Commercial rates and floating rates are fixed as loans sanctioned
under this scheme.51
 Ill

4.8.24 EXPORT MARKETING INFORMATION SERVICE

Export marketing information service is a new option for

software companies for export production and marketing information
service includes strategic export marketing plans, for enhancing
identified target markets at international level. Export import bank of
India also executes international technology fairs, preparation of quality
promotional material for over seas marketing. Recent globalization has
enabled the exim-bank for introducing quality certifications such as
TSO-900‘, ‘Tick IT ‘ which have enhanced international credibility and
dependency on overseas markets.52

4.8.25 ADVISORY SERVICE ON MULTILATERAL

FUNDED PROJECTS OVERSEAS

Indian exporting firms have been provided by EXIM-BANK the

advisory and promotional services on multilateral funded projects
overseas related to marketing cost and exporting risk. The EXIM-BANK
operates a specialized group for enhancing domestic exporters in
securing multilateral funded projects. World bank, Asian development
bank and African development bank are the co-partners with exim-

bank under this programme. Indian customer is undertaking studies

related multilateral agency projects are assisted by EXIM-BANK under
front end financing scheme as a part of project preparatory service
overseas programme.53
 112

D. EXPORT PROMOTION PROGRAMMES

Indian export sector has enhanced its share in the global trade,
very much influenced by export promotion programmes of the export
import bank of India. The following programmes high lights the role of
EXIM-BANK in this context.

4.8.26 PROMOTION OF INDIAN CONSULTANCY

THROUGH AFRICA PROJECT DEVELOPMENT
PROGRAMME

International Finance Corporation and Africa development bank

of India are jointly sponsoring the above programme. The scheme is
assisted by 14 donor countries. Since the inception of the EXIM-BANK it
is having a close relation ship with many African countries with the
view of promoting Indian consultancy in Africa and neighboring
countries. Africa project development programme is a unique in this
context.

4.8.27 NEW PACKAGE PROGAMME FOR FINANCING

SOFTWARE PRODUCT DEVELOPMENT

New financing option has been introduced by the exim-bank for

Indian exporters specially highlighting software technology .

a) Rs.12 crore grant for funding software and technology

consultancy.
 113

b) Grant support funding for multilateral funded agency projects up

to 15 lakhs.

c) Enhanced funding for overseas assignments awarded to Indian

countries.

d) New facility for promoting Indian consultancy in Africa.

e) Comprehensive package for financing Indian joint ventures

overseas.

4.8.28 SOFT WARE PRODUCT DEVELOPMENT

Software industry in India is largely dominated by professional

services to support the industry. EXIM-BANK has introduced software
financing package programme below the EXIM-BANK minimum lending
rate. Rupees two crores is being financed by the bank under software
package scheme annually. The scheme covers import of software tools
encryption technologies, hard work for product development,
specialized skills, up gradation and related costs.

4.8.29 EXPORT MARKETING AND QUALITY CERTIFICATION

Exim-BANK is extending grant support for software companies

for marketing export commodities. Companies are being insisted by the
bank for security international quality standards as such ISO 9000,
Ticket, CMM-SEI. An amount of rupees ten crore is being spent
annually for maintaining international quality standards.'"0
 114

4.8.30 NEW FACILITY FOR INDIAN CONSULTANCY

IN AFRICA

Nairobi based PTA bank and EXIM-BANK of India are co­

financing Indian consultants in PTA financed projects of Africa. PTA
bank is a financial arm in preferential trade area of south and eastern
Africa. 2 million U.S Dollars is being spent by exim-BANK for the year
1992-93. The profile of the projects include pharmaceuticals, plastics,
steel rolling, textiles, financial services and allied industries. In addition
to equity finance bank, is offering on lending loans to Indian ventures
overseas. Indian companies are also benefiting EXIM-BANK guarantees
for enabling them overseas.56

4.8.31 EXIM-BANK OF INDIA AND U.S EXIM-BANK ON

LAND MARK RUPEE GUARANTEE LOAN

Landmark rupee guarantee facility agreement was signed by

export Apex banks of India and U.S.A on September 14th 2000 at

Washington D.C. This facility is unique in several aspects the scheme is

the basis for U.S EXIM-BANK for extending rupee term loans for
American importers accessory material from Indian markets. Since
import loans are denominated in rupee terms, exchange risk for indo
U.S companies are through convertible home currency. The
memorandum of understanding signed by both banks on march 24th
2000 high lights the trade norms. U.S.A being the major source of
 115

capital goods and technology, this rupee land mark facility is an cost
free instrument in promoting trade between the countries.57

4.8.32 EXIM - BANKS ‘ AGRP BUSINESS CELL

The new economic reforms of WTO enabled considerable scope

for exporting Indian agricultural products with a clouser look an global
cost conditions . This focused the EXIM-BANK of India in establishing
Agri business cell in December 2000. The seminar titled "Export of
Agricultural products, prospect and challenges” in association with
maharastra government at Pune served as the forum for clear assessment
of the subject. “Agri” export advantages a monthly news letter is a
product of this scheme. Exim-bank has taken a step ahead in
establishing agro portal regions.53

4.8.33 INFORMATION AND ADVISORY SERVICES

Institutional linkages, planning and research a memorandum of

under standing signed by UTI and EXIM-BANK has enabled the market
access for small and medium sized externally oriented companies.
Foreign economic relations board Turkey, BEI association of Indonesia,
Halton national bank limited of Srilanka are the active members of the
board. Advancement in international linkage of EXIM-BANK has enabled
in exchange of trade and investment related information for universal
regions. Indian machinery, manufatural goods, consultancy and
technology services are being financed by exim-bank on deferred
 116

payments. Exporters are also being financed by regional and global

agencies though the media of exim-bank.

4.834 BANK INITIATIVES

Indian foreign trade is being up graded by export import bank of

India through new initiatives such as.

1) Financing of research and development projects at concessional

rates.
2) Encouragement through equity participation on Indian ventures
abroad.
3) Provision of working capital finance for exporting companies.
4) Special financial package for knowledge based industries as such
information technology, computer software and pharmaceuticals.
5) Establishment of co-operative agreements with PTA bank, U.S
EXIM-BANK, bank of China, Italy, Vietnam, and Korea.

4.8.35 C. 1.1 -EXIM AWARD FOR BUSINESS EXCELLENCE

The confederation of Indian industry and export-import bank of

India have jointly instituted CII-Exim award for business excellence.
The award constituted to promote the awareness of business excellence
through global market capture.^9

The exporting companies with a turnover of sales up to 50 crores

and more than that are eligible for the award.
 117

4.8.36 HISTORY OF AWARD WINNERS

1995:

1) “All India shield “award for excellence in export of electronics

and computer software, awarded to Elelectronics and computer

software promotion council New Delhi.

2) Institute of Charted accountants of India, New Delhi was the CII-

Exim best annual report award.

3) Business Excellency awards were given to

a. Tata Iron and Steel Co. limited.

b. India aluminum co-limited.

c. Widia (India) limited.60

1996:

1) Electronics and computer software promotion council New Delhi

won the special award for excellence under “Category innovation

of new products

2) Ministry of commerce, government of India received the award

of “Certificate of merit for export performance

3) CRB capital markets ltd. received the Lloyds rolling trophy for

global excellence.
 118

4) Hewlett Packard India Limited, Maruthi Udyog limited received

CII-EXIM award as the journey towards business excellence.61

1997:

1) Infosys won the “Best regional company” award. Infosys was

judged by the world economic forum as on of Indians most

remarkable and rapidly growing entrepreneurial companies.62

 EXIM-BANK’S TRANSACTIONS

1992-2002

BUSINESS TRANSACTIONS

TABLE 4.1
EXIM-BANK BIDS APPROVED

YEAR Rs. IN MILLION

1992-1993 86370

1993-1994 144590

1994-1995 95880

1995-1996 72000

1996-1997 93219

1997-1998 121741

1998-1999 160826

1999-2000 160643

2000-2001 42880
i
2001-2002 NA

TOTAL 1050019

SOURCE: EXIM-BANK’S ANNUAL REPORT 2001—2002

 TABLE 4.2
EXIM-BANK COMMITMENTS IN PRINCIPLE

YEAR Rs. IN MILLION

1992-1993 8900

1993-1994 1730

1994-1995 4101

1995-1996 1766

1996-1997 7175

1997-1998 1076

1998-1999 8562

1999-2000 14757

2000-2001 6878

2001-2002 NA
TOTAL

Source :Ibid.
 121

TABLE 4.3
EXPORT CONTRACTORS SECURED BY EXIM-BANK

YEAR Rs.IN MILLION

1992-1993 12655

1993-1994 16769

1994-1995 17030

1995-1996 16030

1996-1997 23196

1997-1998 18946

1998-1999 33068

1999-2000 34440

2000-2001 18331

2001-2002 41620

TOTAL 242962

Source :lbid.
 EXIM—BANK LOANS
TABLE 4.4
LOANS SANCTIONS OF EXIM BANK
YEAR Rs.IN MILLION

1992-1993 15902

1993-1994 6508

1994-1995 29030

1995-1996 29302

1996-1997 12421

1997-1998 18406

1998-1999 18380

1999-2000 28318

2000-2001 21743

2001-2002 42407

TOTAL 229172

Source :Ibid.
 TABLE 4.5

DISBURSEMENTS OF LOANS BY EXIM-BANK

YEAR Rs. IN MILLION

1992-1993 12956

1993-1994 8109

1994-1995 15561

1995-1996 21300

1996-1997 12566

1997-1998 13704

1998-1999 12707

1999-2000 17296

2000-2001 18964

2001-2002 34529

TOTAL 178765

Source ;Ibid.
 TABLE 4,6
OUT STANDINGS OF EXIM BANK

YEAR Rs.IN MILLIONS

1992-1993 18419

1993-1994 20337

1994-1995 25961

1995-1996 20302

1996-1997 34513

1997-1998 38248

1998-1999 42641

1999-2000 50833

2000-2001 56443

2001-2002 66102

TOTAL 373799

Source :Ibid.
 EXIM-BANK GUARANTEES
TABLE 4.7
EXIM-BANKS COMMITMENTS IN PRINCIPLE

YEAR Rs. IN MILLION

1992-1993 6018

1993-1994 7682

1994-1995 8700

1995-1996 9810

1996-1997 11388

1997-1998 12191

1998-1999 16743

1999-2000 22097

2000-2001 5230

2001-2002 10604

TOTAL 106984

Source :Ibid.
 TABLE 4.8
GUARNATEES SANCTIONED BY EXIM BANK

YEAR Rs. IN MILLION

1992-1993 1268

1993-1994 1369

1994-1995 690

1995-1996 2027

1996-1997 1365

1997-1998 4024

1998-1999 2633

1999-2000 4404

2000-2001 2118

2001-2002 5450

TOTAL 20428

Source :Ibid.
 TABLE 4.9

GUARANTEES ISSUED BY EXIM-BANK

YEAR RS.IN MILLION

1992-1993 1043

1993-1994 1037

1994-1995 832

1995-1996 1731

1996-1997 1481

1997-1998 1912

1998-1999 2474

1999-2000 3017

2000-2001 1741

2001-2002 4164

TOTAL 16214

Source :lbid.
 TABLE 4.10

OUT STANDING GUARANTEES OF EXIM-BANK

YEAR Rs .IN MILLION

1992-1993 12134

1993-1994 7517

1994-1995 6836

1995-1996 9081

1996-1997 10215

1997-1998 12094

1998-1999 10553

1999-2000 11147

2000-2001 10740

2001-2002 11273

TOTAL 101590

Source :Ibid.
 EXIM-BANK RESOURCES

TABLE 4.11

EXIM-BANKS TOTAL PADIUP CAPITAL

YEAR Rs.IN MILLION

1992-1993 3356

1993-1994 3574

1994-1995 4403

1995-1996 5000

1996-1997 5000

1997-1998 5000

1998-1999 5500

1999-2000 5500

2000-2001 5500

2001-2002 6500

TOTAL 49333

Source :Ibid.
 TABLE NO 4,12

TOTAL RESERVES OF EXIM-BANK

YEAR Rs. IN MILLION

1992-1993 1819

1993-1994 2261

1994-1995 3119

1995-1996 3997

1996-1997 5445

1997-1998 7058

1998-1999 8352

1999-2000 9584

2000-2001 10664

2001-2002 12026

TOTAL 64325

Source :lbid.
 TABLE NO 4.13
EXIM-BANKS TOTAL DEPOSITS

YEAR RS IN MILLION

1992-1993

1993-1994 1504

1994-1995 1620

1995-1996 1404

1996-1997 660

1997-1998 371

1998-1999 104

1999-2000 2617

2000-2001 2797

2001-2002 3416

TOTAL 14493

Source :Ibid.
 132

TABLE NO 414
EXIM-BANK'S OTHER BORROWINGS

YEAR Rs. IN MILLIONS

1992-1993 11034

1993-1994 10827

1994-1995 14431

1995-1996 13346

1996-1997 20352

1997-1998 21808

1998-1999 21285

1999-2000 20354

2000-2001 20255

2001-2002 16619

TOTAL 170311

Source :lbid.
 TABLE NO 4.15
TOTAL RESOURCES OF THE EXIM-BANK.

YEAR Rs. IN MILLION

1992-1993 26935

1993-1994 28916

1994-1995 36067

1995-1996 36694

1996-1997 49329

1997-1998 51201

1998-1999 56665

1999-2000 70264

2000-2001 73981

2001-2002 82734

TOTAL 512786

Source :lbid.
 Composition of India's Exports
(Rs. in bilion)

100 ISO 200 2S0 300 350 400 450 500

Textiles l abrics & manufactures

4') 8.31

(terms & Jewellers

Engineering (toods

Agricultural & Allied Products

>
Chemicals & \lied Products

l eather & Manufactures

Others
278.37

1999-2000 ■ 2000-01

Graph-4.1
 Composition of India's Imports
(Rs. in hilion)

Petrolium. Oil & Lubricants

Capital Goods

Pearls & Precious Stones

Edible oils

'* Iron & Steel

Fertilisers

Plastic Material & Artificial Resins

Non-ferrous Metals

Paper & Products

ledicinal & Pharmaceutical products

Chemicals

Others

1999-2000 m 2000-01
■r
135

c
 Direction of India’s Foreign Trade
(Rs. in bilion)

Exports to (1999-2000)

(OECD OPEC Eastern Europe Developing Countries Others

Graph-4.3
136
 Direction of India’s ForeignTrade
(Rs. in bilion)

Imports from (1999-2000)

i OECD OPEC Eastern Europe Developing Countries Others

Graph-4.4
137
 Direction of India’s Foreign Trade
(Rs. in bilion)

Exports to (2000-01)

I OECD OPEC Eastern Europe Developing Countries Others

Graph-4.5
138
 Direction of India’s Foreign Trade
(Rs. in bilion)

Imports from (2000-01)

lOECD 30OPIX ^P Eastern Europe ^P Developing C ountries ^ p o th e rs

Graph-4.6
139
 Exim Bank's Total lending
( R s . in m i l l i o n )
1
1 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000 60000 65000 70000
1 J 1

i
O'
O'
O'
1 1 1 1 1 1 1 1 1 1 1

c
rf

r
r
1993-94

1
0
sC
r-
1994-95

c
?
r
rr
1995-96

1996-97

a
a

r*
-r

>
7'
C

-
C
r

c7'
c7'
-
Ch

0c
rr
rr

C
3C
1/

1999-2000
”1
”1
rr

sC
IT

2000-0 1
G
r

2001-02

■ ■ L o an s & A dvances
Graph-4.7
140
 Exim Bank's Regional Distribution of Loans
Sanctions and Disburcement 1992-2002
(Rs. in million)
Sanctions

West Asia HI Sub-Sahara Africa Hi America

South Asia ^|N orth Africa Europe & CIS

Graph-4.8
141
 Exim Bank's Regional Distribution of Loans
Sanctions and Disburcement 1992-2002
(Rs. in million)
D isb u rcem en t
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

4112

■ 3l) IS

West Asia I I Sub-Sahara Africa America

South Asia North Africa

G rap h -4.9
142
 Exim Bank's Total Earnings
(Rs. in million)

500 1000 1500 2000 2500

1992- 93 467

1993- 94

1994- 95

*1100
1995- 96 ► 200
► 1516
1996- 97 ►310

<N
o
h'

1
1997- 98

1998- 1999 330

t"
r-

0
»r,
1999- 2000 §

0
oc

1
2000-01
<N

1L L
fS

2001-02 *420
Profit Before Tax ►
Dividend
Graph-4.10
143
 144

Exim Bank's Industrial Distribution of Loans Sanctioned 1992-2002

(Rs. in million)

Vehicles | Machine Tools & Accessories

Auto & Auto Components | Metal & Metal Processing
Construction Good & Equipment | Power Generation & Distribution
|H Other Capitals & Engineering Goods | Ports Equipment
I Consumer Goods Railway Rolling Stock
Hi Computer Software I Consultancy Services
r I Agricultural Products & Food Processing LU Telecommunications
IH Textiles & Garments Petroleum
i Leather & Leather Products Hotels
Chemicals, Drugs & Pharmaceuticals ; Miscellaneous

Plastics & Packaging GrOph-4.11

 145

REFERENCES

1. EXMBANK ‘X3bjectives,Openalioas-Ogmsizatioas,, A special issue,

November-1993.
2. KALYAN BANERJ1 “ The Export-Import bank of India”, A source of

Export finance, Private circulation edition-1992.

3. Ibid.
4. Ibid.
5. Ibid.
6. EXIM-BANK “Question and Answeis” A special Issue-1995.

7. EXIM-BANK “Annual Report” 1987.

8. EXIM-BANK ‘Export Advantage” A special issue-1992.
9. EXIM-BANK ‘ ‘Objectives,Opeiations4_)gaasizalions’ ’
A special issue-1993.

10. EXIM-BANK “Question and Answers” A special Issue-1985.

11. Ibid.
12. Ibid.
13. Ibid.
14. Ibid.

15. EXIM-BANK “Annual Report” 1996.

16. EXIM-BANK “Question and Answers” A special Issue-1985.
17. Ibid.
18. Ibid.
19. Ibid.
20. Ibid.
21. Ibid.
22. Ibid.
23. Ibid.
24. Ibid.
 146

25. Ibid.
26. Ibid.
27. Ibid.
28. Ibid.
29. Ibid.
30. Ibid.
31. EXIM-BANK “Finance for non Traditional exports policies and
procedures” A special issue-1989.
32. Ibid.
33. Ibid.
34. Ibid.
35. Ibid.
36. Ibid.
37. Ibid.
38. Ibid.
39. Ibid.
40. EXIM-BANK “Export finance in a multi Country equilibrium frame
work” Occasional paper No.24-July-1993.
41. EXIM-BANK “Performance of bids for capital goods and projects
exports-an analysis” Ocassional paper No. 11 December-1990.
42. Ibid.
43. EXIM-BANK “ Question and answers” A special issue -1985.
44. Ibid.
45. Ibid.
46. EXIM-BANK “India and South Africa a Study of trade potential”
June-1993.
47. Ibid.
48. EXIM-BANK "Forfeiting- a new financing options for Indian exports”
A special issue-1993.
 147

49. EXIM-BANK “Performance of Bids for capital goods and project

exports an analysis” Occasional paper No. 11-December-1990.
50. Ibid.
51. Ibid.
52. EXIM-BANK “How import intensive are Indian exports” Occasional
paper No.l6-December-1991.
53. EXIM-BANK “India and South Africa a Study of trade potential”
June-1993.
54. EXIM-BANK “Annual report “1997.
55. EXIM-BANK “Trade creation though trade diversion-A mechanism
for promoting Indian capital goods exports to developing Countries” A
special Issue-March-1986.
56. EXIM-BANK “India and South Africa a Study of trade potential”
June-1993.
57. Downloaded Information.