The export and import Bank of India, commonly known as the EXIM Bank was set up on January, 1982 to take over the operations of the International Finance wing of the IDBI and to provide financial assistance to exporters and importers and to function as the principal financial institution for coordinating the working of other institutions engaged in financing of exports and imports of goods and services. The EXIM Bank provides refinance facilities to the commercial banks and financial institutions against their export- import financing decisions.
Functions of EXIM
- Financing of exports and imports of goods and services not only of India but also of third world countries.
- Financing of exports and imports of machinery and equipment on lease basis.
- Financing of joint venture in foreign countries.
- Providing loan to Indian parties to enable them to contribute to the share capital of joint ventures in foreign countries.
- Undertaking limited merchant banking functions such as underwriting of stock, shares, bonds or debentures of companies engaged in export or import.
- Providing technical, administrative and financial assistance to parties in connection with exports or imports.
At present the EXIM Bank undertakes lending operations under three broad categories namely :
(a) Loans to Indian Companies are provided under the following –
- Direct financial assistance to exporters.
- Technology and consultancy services
- Overseas investment financing for equity participation by an India company in Joint ventures abroad.
- Pre-shipment credit in case of export contract of capital goods.
(b) Loans to foreign government’s companies and financial institutions are provided under –
- Overseas buyers credit scheme
- Lines of credit to foreign governments and
- Relending facilities to banks overseas.
(c) Loans to commercial banks in India including
- Export bills discounting scheme
- Refinance of export credit.
The above mentioned forms of lending by EXIM bank are collectively called Funded Assistance Programmes, which are extended to enable Indian exporters to operate in international markets. The second form of assistance, known as Unfunded Assistance is by way of guarantees of various types. With a view of promote exports, the EXIM bank has introduced three new schemes in recent years :
- Production equipment finance scheme
- Export marketing finance
- Export Vendor Development Finance.
Apart from these functions, the EXIM bank undertakes merchant banking and development banking functions as considered necessary to finance promotional activities and undertake counselling services.