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Major Programmes
Export Credits Finance for Export Oriented Units Overseas Investment Finance Lines of Credit SME & Agri Finance Rural Initiative ,etc
Lines Of Credit
Export Credit
Programmes
Rural Initative
INTRODUCTION:
Export-Import Bank of India is the premier export finance institution of the country, set up in 1982 under the Export-Import Bank of India Act 1981.[2] Government of India launched the institution with a mandate, not just to enhance exports from India, but to integrate the countrys foreign trade and investment with the overall economic growth. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment.
Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering 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[3
Organization
Exim Bank is managed by a Board of Directors, which has representatives from the Government, Reserve Bank of India, Export Credit Guarantee Corporation of India, a financial institution, public sector banks, and the business community. The Bank's functions are segmented into several operating groups including: Corporate Banking Group which handles a variety of financing programmes for Export Oriented Units (EOUs), Importers, and overseas investment by Indian companies. Project Finance / Trade Finance Group handles the entire range of export credit services such as supplier's credit, pre-shipment Agri Business Group, to spearhead the initiative to promote and support Agri-exports. The Group handles projects and export transactions in the agricultural sector for financing. Small and Medium Enterprise: The group handles credit proposals from SMEs under various lending programmes of the Bank. Export Services Group offers variety of advisory and value-added information services aimed at investment promotion. Export Marketing Services Bank offers assistance to Indian companies, to enable them establish their products in overseas markets. Besides these, the Support Services groups, which include: Research & Planning, Corporate Finance, Loan Recovery, Internal Audit, Management Information Services, Information Technology, Legal, Human Resources Management and Corporate Affairs.
Exim Bank plays four-pronged role with regard to India's foreign trade: 1) 2) 3) 4) A coordintator. A source of finance. A consultant . A promoter.
Exim Bank is the Coordinator of the Working Group Mechanism for clearance of Project and Services Exports and Deferred Payment Exports (for amounts above a certain value currently US$ 100 million). The Working Group comprises Exim Bank, Government of India representatives (Ministries of Finance, Commerce, External Affairs), Reserve Bank of India, Export Credit Guarantee Corporation of India Ltd. and commercial banks who are authorised foreign exchange dealers. This inter-institutional Working Group accords clearance to contracts (at the post-award stage) sponsored by commercial bank or Exim Bank,and operates as a one-window mechanism for clearance of term export proposals. On its own, Exim Bank can now accord clearance to project export proposals up to US$ 100 million in value.
EXPORT CREDITS Exim Bank offers the following Export Credit facilities, which can be availed of by Indian companies, commercial banks and overseas entities. For Indian Companies executing contracts overseas Pre-shipment credit Exim Bank's Pre-shipment Credit facility, in Indian Rupees and foreign currency, provides access to finance at the manufacturing stage - enabling exporters to purchase raw materials and other inputs.
Supplier's Credit This facility enables Indian exporters to extend term credit to importers (overseas) of eligible goods at the post-shipment stage. For Project Exporters Indian project exporters incur Rupee expenditure while executing overseas project export contracts i.e. costs of mobilisation/acquisition of materials, personnel and equipment etc. Exim Bank's facility helps them meet these expenses. For Exporters of Consultancy and Technological Services Exim Bank offers a special credit facility to Indian exporters of consultancy and technology services, so that they can, in turn, extend term credit to overseas importers. Guarantee Facilities Indian companies can avail of these to furnish requisite guarantees to facilitate execution of export contracts and import transactions.
For commercial Banks Exim Bank offers Rediscounting Facility to commercial banks, enabling them to rediscount export bills of their customers, with usance not exceeding 90 days. We also offer Refinance of Supplier's Credit, enabling commercial banks to offer credit to Indian exporters of eligible goods, who in turn extend them credit over 180 days to importers overseas.
Other Facilities for Indian Companies Indian companies executing contracts within India, but which are categorized as Deemed Exports in the Foreign Trade Policy of India or contracts secured under international competitive bidding or contracts under which payments are received in foreign currency, can avail of credit under our Finance for Deemed Exports facility, aimed at helping them meet cash flow deficits. For Overseas Entities Buyer's Credit Overseas buyers can avail of Buyer's Credit from Exim Bank, for import of eligible goods from India on deferred payment terms. Eligible Goods Capital goods, plant and machinery, industrial manufactures, consumer durables and any other items eligible for being exported under the 'Exim Policy' of the Government of India.
Project Finance Equipment Finance Import of Technology & Related Services Domestic Acquisitions of businesses/companies/brands Export Product Development/ Research & Development General Corporate Finance
Funded o Working Capital Term Loans [< 2 years] o Long Term Working Capital [upto 5 years] o Export Bills Discounting o Export Packing Credit o Cash Flow financing Non-Funded o Letter of Credit Limits o Guarantee Limits Working Capital Finance (For NonExporting Companies)
Import of Equipment
Export Finance
Suppliers' Credit [including deferred payment credit] Bills Discounting Export Receivables Financing Warehousing Finance Export Lines of Credit (Non-recourse finance)
To part finance project expenditure(Project, inter alia, includes new project/ expansion/ acquisition of business/company/ brands/research & development)
Finance for Indian Company's equity participation in the overseas Joint Venture (JV)/ Wholly Owned Subsidiary (WOS) Direct Finance (Term & Working Capital) to the overseas JV / WOS
Manufacturing facility of 'Advanta Semillas', Argentina, a company Finance (for equity/debt component) producing hybrid seeds of for acquisition of overseas businesses / sunflower, corn, sorghum etc. companies including leveraged buyMumbai based United Phosphorus, outs including structured financing with support from Exim Bank, has options acquired Advanta which has similar facilities in Australia and Direct Equity by Exim Bank in the Thailand, in addtion to Argentina. overseas JV/ WOS of an Indian Company
LINES OF CREDIT
A cricket stadium under construction in Georgetown, Guyana, by Shapoorji Pallonji and Co Ltd., Mumbai. The design and construction of this stadium, at which several matches of the World Cup 2007, were played, has been financed by Exim Bank under a Line of Credit extended to the Government of Guyana.
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. Indian SMEs require business advisory services to enhance their international competitiveness in a highly competitive globalising world. 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.
AGRI FINANCE 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/postshipment 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' AgriBusiness Consortium (SFAC), National Horticultural Board etc. Apart from
financing, the Bank also provides a range of advisory services to agri exporters. The Bank also publishes a number of Occasional Papers, Working Papers on export potential of various sub-sectors in agriculture and a bi-monthly publication in different languages on global scenario in agri-business and opportunities therein
Rural initiatives:
With the advent of globalisation, the barriers to trade are getting dismantled and the dividing line between national and global markets is slowly disappearing. While this phenomenon has resulted in expansion of market opportunities for products and services, it has also made certain sections in developing countries more vulnerable to market vagaries. Thus, the objectives of Exim Bank's rural initiatives are two fold: i. Poverty reduction through export linkages ii. Benefit of Globalisation to grassroot rural enterprises.
With the above objectives in mind, Exim Bank has now made its rural initiatives programme as the core to its operations, as depicted in this diagram. While the other financing programmes will give Exim Bank the volume and the return (topline and bottomline), the rural initiatives will enable the Bank to break new ground in the operations of export credit agencies and leverage its expertise in international market to the benefit of rural poor through creation of export capability in rural enterprises. It is also recognised that these initiatives would require disproportionate amount of resources in terms of time and manpower. But, if these initiatives prove successful and give desired results, it has the potential to enhance the purchasing power of the 'bottom of the pyramid' and will have beneficial spin off effects in all sectors of the economy.
Exim Bank's Formal Tie-Up With NGOs Exim Bank has entered into a formal cooperation arrangement with Confederation of NGOs of Rural India (CNRI), which is a non-profit organization with membership of 5000 NGOs/SHGs spread across all provinces of India. Under this arrangement, Exim Bank will help CNRI members with capacity building, training and access to national and global market. Exim Bank, in addition to CNRI, has entered into formal cooperation arrangements with certain specific, broadbased NGOs in order to directly reach out to the artisans. These arrangements include SEWA (Gujarat), Dhan Foundation (Tamil Nadu), Oorvu (Tribal Association in Kerala), BASIX (Andhra Pradesh). Exim Bank has been working with these NGOS at field level and has been helping in capacity building, quality improvement, market access, training, etc. Exim Bank is also working towards the possibility of exporting traditional Indian know-how and technology to other developing countries. Two such possibilities being explored includes technology to manufacture non-vitrified handmade floor tiles (available with a group of artisans (an NGO) in Southern India) and use of watermills in the Himalayan region to generate small power (by an NGO called HESCO) of 2-3 KW, enough to light up a house or operate a small workshop. The advantage of the above approach is a win-win situation for both the exporter and importer. While the exporting rural NGO will get sizeable technical know fee, the importer will get appropriate, cost effective, simple to operate and maintain technology.