INTRODUCTION

The Export-Import Bank Act, 1981:

An act to establish a corporation to be known as the Export-Import Bank of India for

providing financial assistance to exporters and importers, and for functioning as the
principal financial institution for co-ordinating the working of financial institutions
engaged in financing the export and import of goods and services with a view to
promoting the countrys international trade and for matters connected therewith and
incidental to.

HISTORY:

This Act extends to the whole of India. With effect from the date i.e. September 1981, as
the Central Government by notification, appointed, a corporation Known as the Export
Import Bank of India was established for the purposes of this Act.

The Export Import Bank of India, commonly known as the EXIM Bank, commenced
operations in March 1982. It was set up so as to take over the operations relating to
export finance which the IDBI (Industrial Development Bank of India) had been handling
since the year 1970. Exim Bank acts as the apex financial institution relating to financing
for foreign trade. It provides financial assistance by way of direct loans and advances for
the purpose of export or import,rediscounting of usance export bills for banks and finance
for international trade activities.

OBJECTIVE

The objective of the bank is-

for providing financial assistance to exporters and importers, and for functioning as
the principal financial institution for coordinating the working of institutions engaged in
financing export and import of goods and services with a view to promoting the countrys
international trade

shall act on business principles with due regard to public interest as Stated In the
Export-Import Bank.
Some of main objectives are:

1. To ensure and integrated and co-ordinated approach in solving the allied problems
encountered by exporters in India.
2. To pay specific attention to the exports of capital goods;

3. Export projection;
4. To facilitate and encourage joint ventures and export of technical services and
international and merchant banking;
5. To extend buyers credit and lines of credit;

6. To tap domestic and foreign markets for resources for undertaking development and
financial activities in the export sector.

Functions of Exim Bank

The following are the functions of Export Import bank:
1. Finance for exports and Imports:
Exim bank helps by providing finance for exports and
imports of goods as well as services from India. One of the major export policies adopted
by government of India is the export of value added items. For example, all along we
have been exporting Hades and skins from India. Now, it is processed leather in the
form of leather goods. So, the exporter who was earning 1 or 2 dollars while exporting
Hades and skins will now earn 25 to 30 dollars when he exports in the form of leather
goods. Similarly, import of raw materials such as gold will be financed by Exim bank,
since it will be exported as jewels which is again a value added export.
2. Finance on deferred basis:
Exim bank provides finance on deferred basis for
importing capital equipment and other machinery. The cost of capital equipment in
foreign countries will be more and the Indian importer cannot afford to pay lump
sum payment in foreign exchange. The Exim bank provides guarantee on behalf
on the importer and enables the importer to make payment on installment basis to
the foreign exporter. Or, the bank itself may pay in bulk to the foreign exporter
and receive installment payments from the Indian importer.
3. Lease Finance:
It provides lease finance for importing capital equipment.
Under cross border leasing, the lessor may be in a foreign country, while the lessee
will be in India. The Exim bank helps the Indian lessee in obtaining the capital
equipment on lease by making the lease payment in terms of foreign exchange. It
also helps for import leasing, wherein both the lessor and lessee will be Indians
but the equipment imported on lease may be from U.S. A or U.K.
4. Finance to export projects:

Export projects in Third World countries are financed. India has

taken up various export projects in Third World countries, such as railway project
in Tanzania. Similarly, projects on some of the oil wells in Kuwait and Iraq taken
up by Oil and Natural Gas Commission (ONGC) are also financed by Exim bank.
All the necessary equipment and the manpower required for such projects will be
financed by the Exim bank.
5. Line of credit:
The Exim bank provides line of credit to foreign importers so that
exports from India can increase. Under line of credit, exim bank will provide
finance to the Central bank of the borrowing country which in turn will provide to
the commercial bank and ultimately the credit will reach the importer. This kind of
credit is safe as there is guarantee of funds at every stage.
6. Refinance in foreign exchange:
The Exim bank obtains bulk loan in foreign
currencies in the foreign exchange market and provides refinance to the financial
institutions, providing export finance. Different types of exporters may require
different foreign currencies and these are obtained by the Exim bank at a
competitive interest rate and are given to commercial banks for lending to
exporters. It is due to this, the commercial banks are able to provide pre-shipment
and post-shipment finance to different exporters.
7. Contribution to Equity fund:
The Exim bank also contributes to the shares, debentures of
Indian companies involved in exports. Export companies while raising capital,
may issue shares which may be partly financed by Exim bank. The bank may
extend this facility as a temporary finance as it will not retain the shares

permanently. As a part of investment policy or by way of portfolio investment, it

may invest in the shares and debentures of companies involved in exports.

8. Consultancy Services:
The Exim bank also provides technical, administrative and other
assistance to exporters. Export projects are analyzed by the Exim bank from the
point of view of technical, managerial, marketing and financial feasibility. When it
finds a project viable, on the above grounds, it will not hesitate to fund it.

Important role [facilities provided by EXIM]

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.
Pre-shipment credits are usually extended by exporters commercial banks for period
upto 180 days. Exim Bank extends pre-shipment / post-shipment credit either directly or
in participation with commercial banks. In order to offer one-stop banking products to
export clients, the Bank has also been offering short-term pre / post shipment credit either
directly or through exporters bankers. Exim Bank may consider extending pre-shipment
credit and post-shipment credit for periods exceeding 180 days, on case-to-case basis and
subject to the merits of the case.
Supplier's Credit
This facility enables Indian exporters to extend term credit to importers (overseas) of
eligible goods at the post-shipment stage.
Post-shipment Suppliers Credit can be extended to Indian exporters upto the extent of
the deferred credit portion of the export contract, either in Rupees or in Foreign currency.

The period of deferred credit and moratorium will generally depend on the nature of
goods [List A and List B of Memorandum PEM] or nature of projects, as per guidelines
contained in the Memorandum PEM of RBI.
1.2.3 For Project Exporters
Export Project Cash-Flow Deficit Financing Programme [EPCDF]
Indian project exporters (including those under Deemed Exports category) incur
expenditure in rupee or foreign currency while executing contracts i.e. costs of
mobilisation/acquisition of materials, personnel and equipment etc. Exim Bank's facility
helps them meet these expenses for a) Project Export Contracts;
b) contracts in India categorized as Deemed Exports in the Foreign Trade Policy of
India.
Capital Equipment Finance Programme (CEFP)
Capital Equipment Finance Programme [CEFP] has been conceived to cater to capital
expenditure for procurement of capital equipment to be utilized across multiple contracts.
CEFP provides direct access to Exim Banks finance for eligible Indian companies for
procurement of indigenous and imported capital equipment for executing overseas
projects / deemed export projects.
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 guarantee facilities of different types to furnish requisite
guarantees to facilitate execution of export contracts (including deemed export contracts)
and import transactions.
Advance Payment Guarantee (APG): Issued to project exporters to secure a project
mobilization advance as a percentage (10-20%) of the contract value, which is generally
recovered on a pro-rata basis from the progress payment during project execution.
Performance Guarantee (PG): PG for up to 5-10% of contract value is issued valid
until completion of maintenance period and/or grant of Final Acceptance Certificate
(FAC) by the overseas employer/client.
Retention Money Guarantee (RMG): This enables the exporter to obtain the release of
retained payments from the client prior to issuance of Project Acceptance Certificate
(PAC)/ Final Acceptance Certificate (FAC).
Other Guarantees: e.g. in lieu of customs duty or security deposit for expatriate labour,
equipment etc.
Eligibility: Indian project exporters securing overseas or deemed export contracts.
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. As per Memorandum PEM guidelines, RBI
has authorised Exim Bank to extend overseas buyers credits upto USD 20 mn for project
exports without seeking approval of RBI.
The facility enables exporters/contractors to expand abroad and into non-traditional
markets. It also enables exporters/contractors to be competitive when bidding or
negotiating for overseas jobs.
Benefits to Foreign Customers
Enables overseas buyers to obtain medium-and long-term financing
Competitive interest rate against host country's high cost of borrowing.
Eligibility:
Buyer's Credit is extended to a foreign project company that intends to award the project
execution to an Indian project exporter. The financing will be available to all kinds of
projects and service exports from India. Facility is available for development, upgrading
or expansion of infrastructure facilities; financing of public or private projects such as
plants and buildings; professional services such as surveyors, architecture, consultations,
etc.
Buyers Credit under NEIA
Buyers Credit NEIA is a unique financing mechanism that provides a safe mode of
non-recourse financing option to Indian exporters and serves as an effective market entry
tool to traditional as well as new markets in developing countries, which need deferred
credit on medium or long-term basis.

Under this facility, Exim Bank facilitates project exports from India by way of extending
credit to overseas sovereign governments and government owned entities for import of
Indian goods and services from India on deferred credit terms. Exim Bank will obtain
credit insurance cover under NEIA through ECGC. NEIA is a trust set up by the Ministry
of Commerce and administered by Export Credit & Guarantee Corporation of India
(ECGC).Facility is available for project exports requiring medium or long term deferred
credit.
Eligibility:
Exim Bank extends the credit directly to overseas buyer of projects from India without
recourse to Indian exporter. Borrower should be overseas sovereign governments or
government owned entities. Amount of Loan should generally not be more than 85% of
the contract value. Sovereign guarantee is needed where the borrower is other than the
foreign government. Any other security may be stipulated on a case-to-case basis.
The Project Finance menu of funded and non-funded facilities to Indian exporters,
commercial banks in India and overseas entities is given below:
For Indian Exporters
Post-shipment Suppliers Credit
Export Project Cash flow Deficit
Financing Program

For Commercial Banks in India

Risk
participation
in
funded
facilities

non-funded
extended

to

Indian exporters.
Refinance of Export Credit
For Overseas Entities

 Pre-shipment Credit in Rupee and

Foreign Currency
Finance for Export of Consultancy
and Technology Services

Buyers Credit
Buyers Credit under
NEIA

Finance for Deemed Export contracts

Capital Equipment Finance
Financing Deemed Export contracts
secured via structures including but
not restricted to BOT / BOO / BOOT
/ BOLT
Letters of Credit / Guarantees
RBIs Memorandum PEM has to be referred for Project and Service Exports.
Export Capability Creation loans extended by the Bank may be classified into three
broad categories viz. finance for overseas investment, finance for export oriented units
and finance for financial intermediaries. Besides loans, the Bank also extends non-fund
based assistance by way of guarantees and Letters of Credit (L/Cs).

OVERSEAS INVESTMENT FINANCE PROGRAMME

Exim Bank encourages Indian companies to invest abroad for, inter alia, setting up
manufacturing units and for acquiring overseas companies to get access to the foreign
market, technology, raw materal, brand, IPR etc. For financing such overseas
investments, Exim Bank provides:
a) Term loans to Indian companies upto 80% of their equity investment in overseas JV/
WOS.
b) Term loans to Indian companies towards upto 80% of loan extended by them to the
overseas JV/ WOS.
c) Term loans to overseas JV/ WOS towards part financing
(i) capital expenditure towards acquisition of assets,
(ii) working capital,
(iii) equity investment in another company,
(iv) acquisition of brands/ patents/ rights/ other IPR,

(v) acquisition of another company,

(vi) any other activity that would otherwise be eligible for finance from Exim
Bank had it been an Indian entity.
d) Guarantee facility to the overseas JV/ WOS for raising term loan/ working capital.
Eligibility to avail finance or services:
Exim Bank's funded/ non-funded assistance is generally with recourse to the Indian
promoter Company. Exim Bank financing is available in Indian Rupees (to the Indian
borrower) and in foreign currency [as per extant RBI guidelines]. The tenor range is
usually 5-7 years with a suitable moratorium, and repayments in suitable monthly/
quarterly installments. Promoter margin is minimum 20% and security will include inter
alia appropriate charge on the assets of the overseas entity, Corporate Guarantee of the
Indian promoter backed by appropriate charge on its assets, Political and/ or commercial
risk cover, Pledge of shares held by the Indian promoter in the overseas venture etc.
Export- Oriented Units, Corporate Banking
The Bank offers a number of financing programmes for Export Oriented Units (EOUs),
importers and for companies making overseas investments. The financing programmes
cater to the term loan requirements of Indian exporters for financing their new project,
expansion, modernization, purchase of equipment, R&D, overseas investments and also
the working capital requirements.
Finance for Corporates
Research & Development Finance for Export Oriented Units:

Exim Bank encourages Indian exporters to invest more in their R&D spending in order to
develop new products/processes/ IPRs for enhancing export capabilities. Considering the
need to bridge the funding gap of Indian exporters in R&D space, the Bank has a
dedicated R&D Financing Programme. Under the said Programme, financing for R&D
can be extended to any export oriented company/ SPV promoted by companies,
irrespective of the nature of industry. The financing covers both capital and revenue
expenditure including inter alia:

Land and building, civil works for housing eligible R&D activities;

Equipments, tools, computer hardware/ software, miscellaneous fixed assets used

in eligible R&D activities;

Acquisition of technology from India or overseas at the proof of concept or

design stage, which will be used to develop new product/ process.

Salaries of R&D personnel, support staff during the R&D project phase including
training costs;

Cost of regulatory approvals, filing and maintenance of patent registration;

Product documentation and allied costs during the R&D project phase.

Costs of materials, surveys, technology demonstration studies and field trial

Any other costs to enhance R&D capability.

Eligibility:

Export oriented firms with exports (actual/projected) of at least `5 crores or 10%

of annual turnover.

R&D finance is generally extended upto 7 years. However, longer tenors with
suitable interest resets would be permissible. Structured repayment can be considered
to match the cash flow.

Upto 80% of the total project cost can be funded.

Security to include, inter alia, appropriate charge on the assets, Corporate

Guarantee, charge/ assignment on the regulatory approval/ IPR, personal guarantee
etc.

Pre-shipment/Post-shipment Credit Programme:

Exim Bank extends export credit to Indian exporters to meet a wide range of trade
financing requirements for execution of an export transaction. The Bank provides
working capital finance by way pre-shipment credit and post-shipment credit. Bank also
extends as part of export credit assistance, non-fund based limits inter alia including
issuance of Letters of Credit (both Foreign & inland) and Bank Guarantees (both Foreign
& inland) for its clients. The credit limits are generally extended as part of Borrowers
consortium limit and are operated as a running account facility. The limits may be
renewed for further period subject to satisfactory review of account and depending on the
Borrowers export credit requirement. The facilities can be drawn in either Indian Rupee
or Foreign Currency.
Eligibility:

Indian exporters with a track record.

The limit should be within the MPBF of Borrowers assessed bank finance.

Margin of 15-20% under pre-shipment and 0-10% under post-shipment.

Adequate security to be provided. Typical security includes appropriate charge on

the current assets including export receivables, ECGC cover etc.

Lending Programme for Export Oriented Units:

Exim Bank provides term loans to export oriented Indian companies to finance various
capital expenditures including certain soft expenditures in order to improve their export

capability and to enhance their international competitiveness. Loans/Guarantees are

extended for the following purposes: Expansion, modernization, upgradation or
diversification projects including acquisition of equipment, technology etc.; export
marketing; export product development; setting up of Software Technology Parks;
Eligibility:
Manufacturing/trading/services

companies

with

minimum

export

orientation

(actual/projected) of 10% of their annual turnover, or exports of `5 crore p.a., whichever

is lower [inclusive of exports through Export/Trading Houses], are eligible to avail
finance from Exim Bank. Exim Bank financing is available in Indian Rupees and in
foreign currency [as per extant RBI guidelines]. The tenor range is usually 7-10 years
with a suitable moratorium, and repayments in suitable monthly/ quarterly installments.
Promoter margin is minimum 20% and appropriate charge on the fixed assets of the
company/project plus any other acceptable security including personal guarantees may be
stipulated.
Finance for MSMEs
Apart from the Corporate Banking facilities, there are additional services that Exim Bank
offers to support Small and Medium Enterprises.
SME-ADB Line:
Exim Bank has arranged for a credit line from the Asian Development Bank (ADB) for
providing foreign currency term loans to the MSME borrowers in certain specific lagging
states of India, viz. Assam, Madhya Pradesh, Orissa, Uttar Pradesh, Chhattisgarh,
Jharkhand, Rajasthan and Uttarakhand. These foreign currency term loans can also
finance domestic capital expenditure of the borrowers in Indian Rupees, besides meeting

their foreign currency capital expenditure requirements. The assistance to these MSMEs
will help in increasing competitiveness in the relatively backward states and help in
integrating them into the mainstream economy.
Eligibility:
Export oriented MSMEs (as defined in MSMED Act, 2006) incorporated in the above
mentioned lagging states
Purpose: To meet long term foreign currency loan requirements of Indian exporting
entities in the MSME sector for financing their eligible capital expenditure. pertaining to
inter alia setting up of new facilities, expansion/modernization of existing facilities,
acquisition of equipment and plant & machinery, setting up of testing/R&D facilities,
setting up of captive power plants/co-generation plant, setting up of infrastructure
facilities like effluent treatment plants, storages/warehouses, etc. The Tenor of the loan
will be upto 7 years including suitable moratorium.
For cluster of Indian MSME EOUs
Exim Bank, besides providing financial assistance to individual MSME EOUs, also
provides financial assistance to Special Purpose Vehicles (SPVs) of a cluster of MSMEs.
Term loans are provided to such clusters of MSME units for the following activities:

Development of new geographically contiguous cluster/industrial park, involving

creation & maintenance of common infrastructure and common facilities, including
inter alia construction of buildings and civil works, acquisition of assets/technology,
for the benefit of industrial units within the cluster/industrial park.

Development of an industrial estate, by industrial users, industry associations

and/or Government bodies.

Up-gradation of an existing industrial cluster or industrial estate.

Development of specific infrastructure, including common effluent treatment

plant, captive power plant, transportation linkages, hazardous waste disposal.

Development of Common Facilities Centers like testing centers, cold storages, for
industrial clusters, industrial estates, or a group of industries with common interests.

Technology & Innovation Enhancement and Infrastructure Development Fund

(TIEID):
With a view to facilitate credit flow to the MSME sector at competitive rates, Exim Bank
has set up a Technology and Innovation Enhancement and Infrastructure Development
(TIEID) fund of USD 500 mn exclusively for MSMEs, to augment their export
competitiveness and internationalisation efforts, by partnering with banks / FIs. TIEID
seeks to meet long term foreign currency loan requirements of Indian exporting entities
in the MSME sector for meeting capital expenditure, through refinancing of Banks / FIs
against their eligible SME financing portfolio.
Eligibility:
Scheduled Commercial Banks / Financial institutions in India having acceptable credit
risk for on-lending to MSME units.
Eligible Beneficiary:
Ultimate Beneficiary of the Foreign Currency funds provided to eligible Banks/FIs shall
be MSME units in India having a minimum export orientation of 10% of annual turnover
or exports of ` 5 crores p.a in absolute terms, whichever is lower. The loan should be used
to meet long term foreign currency loan requirements of Indian exporting entities in the

MSME sector for meeting eligible capital expenditure. Eligible capital expenditure
include technology upgradation, capacity creation, common infrastructure development
like captive power plant, common effluent treatment plant, hazardous waste disposal
facility, testing facilities etc.
Lending Programme for Financing Creative Economy:
The Creative Industries are those industries which have their origin in individual
creativity, skill and talent and which have a potential for wealth and Job creation through
the generation and exploitation of intellectual property viz., Advertising, Architecture,
Art and Antiques Market, Crafts, Design, Designer Fashion, Film and Video, Interactive
Leisure Software, Music, Performing Arts, Publishing, Software and Computer Services,
Television and Radio etc. In view of the large untapped potential for increasing exports
by the creative industries and in order to provide a strategic focus to this sector and
enhance Exim Banks presence in the creative economy space, and as a corollary, in the
MSME segment, Exim Bank has introduced a Programme specifically for financing the
Creative Economy.
Eligibility:
The illustrative list of industry sectors include Heritage {Traditional Cultural Expressions
(Art & Crafts, Festivals, Celebrations etc), Cultural Sites (Historical Monuments,
Museums, Libraries, Archives etc)}; Arts {Visual Arts (Painting, Sculpture, Antique,
Photography etc), Performing Arts (Live Music, Theatre, Dance, Opera, Puppetry etc)};
Media { Publishing & Printed Media (Books, Newspapers, Press & other Publications),
Audio Visuals (Film, TV & Radio, Broadcasting etc), New Media (Digitised Content,
Software, Video Games, Animations etc); Functional Creations { Design (Interior,
Graphic, Fashion, Jewellery, Toys etc), Creative Services (Architecture, Advertising,
Creative R & D, Cultural Services, Digital Services etc)}

Finance for Grassroots Enterprises

The Bank supports globalisation of enterprises based out of rural areas of the country
through its GRID programme. Through this initiative, the Bank extends financial support
to promote grassroots initiatives/technologies, particularly those having export potential.
The objective of the programme is to help artisans/producer groups/clusters/small
enterprises across the country realize remunerative return on their produce essentially
through facilitating exports from these units. The group handles credit proposals from
such organizations working at the rural /grassroots level and offers tailor-made financial
products to cater to their needs. The group is mandated to work towards developing a
robust, vibrant and holistic approach in its intervention by providing assistance at various
stages of product development / business cycle including capacity building, export
capability creation, expansion/diversification and finally exports. The broad areas of
support extended by the Bank through its grassroots initiatives inter alia, include capacity
building, development of common facility centres, construction of raw material bank,
technology upgradation and creation of export capability.
ELIGIBILITY:
The organisations eligible for support should meet various criteria including, but not
limited to the following:
Should be a legal entity registered under respective State/Central Govt. Act as a
Society, Trust, Co-operative, Private Limited Company, Producer Company, or NGO
etc;
Should be working with communities at grassroots level for promoting income
generating activities (IGAs) based on the traditional skills using indigenous or locally

available materials in the areas of product development & design, capacity building,
market development etc.;
Should have proven track record of creating /adopting sustainable livelihood model
which could be upscaled and replicated across the geographies sharing similar
characteristics (demographic, cultural, socio-economic similarities, etc
Should be exporting, directly or indirectly
A Line of Credit (LOC) is a financing mechanism through which Exim Bank extends
support for export of projects, equipment, goods and services from India. Exim Bank
extends LOCs on its own and also at the behest and with the support of Government of
India. Exim Bank extends Lines of Credit to:
a) Foreign Governments or their nominated agencies such as central banks, state
owned commercial banks and para-statal organizations;
b) National or regional development banks;
c) Overseas financial institutions;
d) Commercial banks abroad;
e) Other suitable overseas entities.
The above mentioned recipients of LOCs act as intermediaries and on lend to overseas
buyers for import of Indian equipment, goods and services. LOC is a financing
mechanism that provides a safe mode of non-recourse financing option to Indian
exporters to enter new export markets or expand business in existing export markets
without any payment risk from the overseas importers.

BROAD GUIDELINES AND PROCEDURE FOR GOVERNMENT OF

INDIA SUPPORTED LINES OF CREDIT
The Government of India (GOI), in 2003-04, formulated the Indian Development
Initiative (IDI), now known as Indian Development and Economic Assistance Scheme
[IDEAS] with the objective of sharing Indias development experience through
(a) capacity building and skills transfer,
(b) trade, and
(c) infrastructure development,
by extending concessional Lines of Credit (LOCs) routed through Exim Bank, to
developing partner countries, towards creating socio-economic benefits in the partner
country. Recently, the Ministry of External Affairs (MEA) has set up the Development

Partnership Administration (DPA) Division to deal with Indias development assistance

programmes abroad, including LOCs routed through Exim Bank. These LOCs are now
increasingly being extended to partner countries for large-scale and complex projects
(project exports from India).
Bilateral or multilateral assistance, through lines of credit, typically follows a sequence of
standard procedures, viz.
a) project identification and preparation,
b) review and approval of the project proposal,
c) offer of the loan, acceptance and execution of loan agreement,
d) project implementation, monitoring and supervision, and
e) socio-economic impact assessment after project completion.
The lessons learned from the impact assessment / evaluation act as a feedback to the
preparation, review and implementation of future projects. This process forms the 'project
cycle.'

BROAD

GUIDELINES

AND

PROCEDURE

EXIM

BANKS

OWN

COMMERCIAL LINES OF CREDIT.

Exim Bank, since its inception, has been extending LOCs to various countries to promote
export of Indian projects, products and services. Under the LOCs extended by Exim
Bank to overseas financial institutions, foreign governments, regional and national
development banks and commercial banks, Exim Bank finances all items eligible for
being exported under the 'Foreign Trade Policy' of Government of India. The credit
periods for these LOCs are generally upto 7 years and the LOCs typically carry LIBORlinked interest rates.
Research & Analysis

Exim Banks Research & Analysis Group (RAG) offers a vast range of research products.
The Banks team of experienced economists and strategists provide insights on aspects of
international economics, trade and investment through qualitative and quantitative
research techniques. RAG monitors the global trends in the world and domestic
economies and the impact of these trends, especially on India and other developing
economies. RAG caters to the constituents within the Bank, as well as to those external to
the Bank such as Government, RBI, exporters/importers, trade & industry
associations,external credit agencies, academic institutions and researchers.

The research work carried out in the Group under the broad classification of regional,
sectoral and policy related studies, are published in the form of Occasional Papers,
Working Papers, Books, etc. These research studies primarily envisage identifying
avenues for enhancing India's international engagement.

The group also undertakes country profiles, which assess the economic, political,
currency and credit risks involved, along with the export opportunities in the country
concerned. Further the profiles provide short-to-medium term economic outlook of a
country, indicating the economic risk involved in doing business with country.

As a part of the support services and with an objective to provide contemporary

information to Indian traders and investors, the group disseminates information on export
opportunities and highlights developments that have a bearing on Indian exports, through
its quarterly bulletin, Eximius: Export Advantage. The newsletter comprises of regional
and industry outlooks, Banks activities, opportunities in multilateral funded projects and
contract awards, review on select traded currencies and countries, and a section on the

happenings during the quarter. The newsletter is a free publication, effectively distributed
to a wide network of scholars, economists, institutions, Government of India offices, and
export promoting organisations.

The Bank also brings out a bi-monthly publication titled Agri Export Advantage in
English, Hindi and 10 regional languages (Assamese, Bengali, Gujarati, Kannada,
Marathi, Malayalam, Oriya, Punjabi, Tamil, and Telugu). The newsletter provides
stakeholders of Indian agribusiness with updates on global agri-environment and
markets, research reports on agri-commodities, international issues related to agribusiness, prospective areas of agribusiness, agricultural trade and trade policies,
regulatory issues in international trade, WTO Government schemes and assistance, latest
international news brief and Bank's activities to promote agri-export from India.

The Bank Brings out a bilingual Indo-China Newsletter featuring areas of cooperation
between India and China.

Marketing Advisory Services

Exim Bank plays a promotional role and seeks to create and enhance export capabilities
and international competitiveness of Indian companies. Exim Bank through its Marketing
Advisory Services helps Indian exporting firms in their globalisation efforts by
proactively assisting in locating overseas distributor(s)/buyer(s)/ partner(s) for their
products and services. The Bank assists in identification of opportunities overseas for
setting up plants or projects or for acquisition of companies overseas. MAS Group

leverages the Bank's high international standing, indepth knowledge and understanding
of the international markets and well established institutional linkages, coupled with its
physical presence, to support Indian companies in their overseas marketing initiatives on
a success fee basis. Exim Bank has been able to successfully place a range of products in
overseas as well as domestic markets.
Eligibility :
Any company/firm wanting to export its quality products/services is eligible to avail this
benefit as long as it does not fall in the negative list of India's Foreign Trade Policy and
International Conventions. Marketing Advisory Services are provided across all the
sectors. Information required from the company is as under: Company profile
Product Brochures
Printed material
Prices
Existing export markets & target markets
Minimum order quantity
Quality certifications
Samples, as and when required
EXPORT ADVISORY SERVICES GROUP (EAS)
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.

The Group undertakes customised research on behalf of interested companies in the areas
such as establishing market potential, defining marketing arrangements, and specifying
market distribution channels. Developing export market entry plans, facilitating
accomplishment of international quality certification and display of products in trade
fairs and exhibitions are other services provided.
The Bank provides a wide range of information, advisory and support services, which
complement its financing programmes. These services are provided on a fee basis to
Indian companies and overseas entities. The scope of services includes market-related
information, sector and feasibility studies, technology supplier identification, partner
search, investment facilitation and development of joint ventures both in India and
abroad.
Multilateral Funded Projects Overseas (MFPO)
The Bank provides a package of information and support services to Indian companies to
help improve their prospects for securing business in projects funded by the World Bank,
Asian Development Bank, African Development Bank, and European Bank for
Reconstruction and Development.

Exim Bank as a Consultant

The Banks experience in evolving as an institution supporting international trade and
investment, in addition to functioning as an export credit agency in a developing country
context, is of particular relevance in other developing countries. The Bank has been
sharing its experience and expertise by undertaking consultancy assignments. Exim Bank
also shares its experience and expertise through provision of on-site exchange of

personnel programmes aimed at providing a first-hands experience to the employees of

its institutional partners.
Institutional Linkages
The Bank has fostered a network of alliances and institutional linkages with multilateral
agencies, export credit agencies, banks and financial institutions, trade promotion bodies,
and investment promotion boards to help create an enabling environment for supporting
trade and investment. The Global Network of Exim Banks and Development Finance
Institutions (G-NEXID) was set up in Geneva in March 2006 through the Banks
initiative, under the auspices of UNCTAD. With the active support of a number of other
Exim Banks and Development Finance Institutions from various developing countries,
the network has endeavoured to foster enhanced South-South trade and investment
cooperation. Observer Status in UNCTAD underscores support for the Forum.
Award for Excellence
The Bank, in association with CII, has instituted an Annual Award for Business
Excellence for best Total Quality Management (TQM) practices adopted by an Indian
company. The Award is based on the European Foundation for Quality Management
(EFQM) model.

ORGANISTIONAL STRUCTURE OF EXIM

The Nine Domestic Offices of the Bank

Helps to respond to regional development activities in the export sector. They identify
special needs of the export business through close interaction with existing and
prospective clients and suggest innovative instruments appropriate to the regions

potential. They also regularly interact with commercial development /government

agencies, and strengthen the banks policy mechanism with their critical inputs on market
perceptions and the export environment.

Detailed appraisals, legal documentation, initial processing of loan disbursement

requests, and monitoring of loans, including site visits, inspection of assets charged to the
bank and overall monitoring of the performance of the companies are also done at
domestic office

ORGANISATIONAL SET-UP

Exim bank is managed by a Board of Directors, which has high level representatives
from the Government, Reserve Bank of India, Export Credit Guarantee Corporation of
India, public sector Banks, academia and business community. With its headquarters in
Mumbai, the bank has nine regional offices overseas.
The banks 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 investment by Indian companies.
Project finance/trade finance group which handles the entire range of export credit
services such as suppliers credit, pre-shipment credit, buyers credit, finance for export
of projects and consultancy services, guarantees, forfeiting.

Lines of credit group- lines of credit (LOC) is a financing mechanism that provides a
safe mode of non recourse financing option to Indian exporters, especially to SMEs,
and serves and an effective market entry tool. Exim banks extends LOCs to sovereign
governments, central banks, regional development banks, overseas financial
institutions and other entities overseas, to enable buyers in those countries, to import
equipment, goods and services from India, on deferred credit terms.

Agri business group, which has been put in place 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 enterprises group has been established to cater to the specific
financing requirements of export oriented SMEs.The group handles credit proposals
from SMEs under various leading programmes of the bank.

Export services group offers a variety of advisory and value-added information

services aimed at trade and investment

promotion.

Apart from these, there are Support Services Groups, which include:

Research and Planning, Corporate Finance, Loan recovery, Internal Audit,

Management Information Services, Risk Management, Information Technology,
Legal, Human Resources Management and Corporate Affairs.

THE ROLE

Exim bank plays a four-pronged role with regard to Indias foreign trade: those of a
coordinator, a source of finance, consultant and promoter.

COORDINATION ROLE

Exim bank is the coordinator of the working group mechanism for clearance of
projects 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), and Reserve Bank of India; export credit Guarantee Corporation of India
limited and commercial banks that are authorized foreign exchange dealers.

This inter-institutional Working Group accords clearance to contracts (at the post
award stage) sponsored by commercial banks or Exim Bank, and operates as onewindow mechanism for clearance of term export proposals. On its own Exim bank
can now accord clearance to project export proposals up to US $100million in value.

EXPORT CREDIT.

Exim bank offers the following export credit facilities, which can be availed of by Indian
companies, commercial banks and international entities.

FOR INDIAN COMPANIES EXECUTING CONTACTS OVERSEAS

 PRESHIPMENT CREDIT.

Exim banks pre-shipment credit facility, in Indian rupees and foreign currencies, provides
access to finance at a manufacturing stage, enabling exporters to purchase raw materials
and other inputs.

SUPPLIERS CREDIT

This facility enables Indian exporters to extend term credit to importers (overseas) of the
eligible goods at the post shipment stage.

FOR PROJECTS EXPORTERS.

Indian project exporters incur Rupee expenditure while executing overseas project export
contracts i.e. costs of mobilization/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
and export contracts and import transactions.

Forfeiting.

Forfeiting is a financing mechanism that enables a company to convert credit sale to cash
sale, on without recourse basis. Exim bank acts as facilitator for the Indian exporter,
enabling him to access the services of an overseas forfeiting agency.

FINANCE FOR EXPORT ORIENTED UNITS.

TERM FINANCE FOR EXPORTING COMPANIES

Project Finance
Equipment Finance
Import of Technology & Related Services
Domestic Acquisitions of businesses/companies/brands
Export Product Development/ Research & Development
General corporate finance.

WORKING CAPITAL FINANCE FOR EXPORTING COMPANIES.

Funded

Working Capital Term Loans [< 2 years]

Long Term Working Capital [up to 5 years]

Export Bills Discounting
Export Packing Credit
Cash Flow financing.

Non-funded

Letter of credit limits

Guarantee limits

Working Capital Finance For Non- Exporting

Companies.

Bulk Import of Raw Material.

Term Finance For Non- Exporting Companies.

Import of Equipment

Export Finance.

Equity Participation In Indian Exporting Companies.

To part finance project expenditure (Project, inter alias, 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

Finance (for equity/debt component) for acquisition of overseas businesses / companies

including leveraged buy-outs including structured financing options.

Direct Equity by Exim Bank in the overseas JV/ WOS of an Indian Company.

EXPORT IMPORT BANK OF INDIA - SMALL & MEDIUM

ENTERPRISES & AGRICULTURAL FINANCE

Definition of SMEs in India and World:

In India the small and medium enterprises are not well defined. The internal group set up
by the Reserve Bank of India has recently recommended that the units with investment in
plant and machinery in excess of SSI limit and upto Rs. 10 crores may be treated as
medium enterprises. The definitions of small and medium sized enterprises differ from
one country to another. SMEs have been defined against various criteria such as the
number of workers employed, volume of output or sales, value of assets employed, and
the use of energy. Organization for Economic Cooperation and Development (OECD)
defines establishments with upto 19 employees as very small, between 20 and 99
employees as small, from 100 to 499 employees as medium and over 500 employees as
large enterprises. However, many establishments in some developing countries with 100
to 499 employees are regarded as relatively large firms. Multilateral Investment
Guarantee Agency (MIGA) has recently developed a guarantee programme, called the
Small Investment Programme (SIP) that is specifically designed for SMEs. MIGA defines
SMEs, for coverage under this programme, as firms with not more than 300 employees,
value of assets not exceeding US $ 15 million and annual sales not exceeding US $ 15

million. The European Union defines SMEs that have employees of less than 250, with a
turnover not exceeding Euro 50 million. Thus the definition of SME varies from country
to country and from region to region. 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.

Importance of the SME sector:

The SSI sector in India employs around 26 million people and is involved with the
production of over 7500 industrial items with the product range varying from ver simple
items produced with traditional technology to high tech products. At present, the SSI
sector accounts for over 90% of industrial units in the country, 40% of value addition in
the manufacturing output and approximately 35% of Indias exports. SSI sector in India
has been exhibiting a striking export performance. Barring few years, exports have grown
double digit in the last 10 years. Major sectors contributing to SSI exports include
readymade garments (27%), engineering goods (14.5%), chemicals & pharmaceuticals,
electronics & computers, and processed foods (11% each

EXIM BANK AND SMES:

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. Recognizing 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.

In the past, Exim Bank has implemented a number of innovative programmes focusing
primarily on SMEs. The Bank, in the past, has operated an Agency Line of Credit for
IFC and an Export Marketing Programme for the World Bank, which are targeted
towards SME sector. The Bank proactively assists SME units in establishing their
products in international markets. Exim Banks Lines of Credit help SMEs to offer
competitive credit term to the buyers and to explore newer geographical markets.
Recently, the Bank has signed a Memorandum of Cooperation with the International
Trade Centre (ITC), Geneva, to implement the Enterprise Management Development
Services (EMDS) programme, for supporting SMEs in their globalisation efforts. This
initiative is being launched by ITC for the first time in any country.

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/post- shipment

credit, overseas buyers' credit, bulk import finance, guarantees etc. Term loans with
varying maturities are provided for setting up processing facilities, expansion,
modernization, purchase of equipment, import of equipment/technology, financing
overseas joint ventures and acquisitions etc.

The Bank has strong linkages with other stakeholders in Agri sector such as Ministry of
Food Processing Industries, GoI, NABARD, APEDA, Small Farmers' Agri-Business
Consortium (SFAC), and National Horticultural Board etc. Apart from financing, the
Bank also provides a range of advisory services to Agri exporters. 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, Government
of India, NABARD, APEDA, Small Farmers' Agri-Business Consortium (SFAC), and
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 bimonthly publication in different languages on global scenario in agri-business and
opportunities therein.

Initiatives by Exim Bank for both Small and Medium Enterprises & Agri finance:

Exim Bank has signed a Memorandum of Cooperation with DHAN Foundation,

Madurai (a leading NGO covering 3 lakh families in 4 states) for advisory and financial
support for export related activities for their grass root enterprises

Set up units to produce value-added products from organic tamarind grown in the area
Steps are on to set up an export oriented coco-peat projects

To market products made out of palm leaves and handmade papers in Europe through
our overseas offices.

To devise marketing strategy for marketing local handicrafts to foreign tourists through
5 star hotels.

Exim Bank has signed Memorandum Of Cooperation with BASIX, Hyderabad. BASIX
promotes development for the rural poor and women, mainly through Micro-credit and
Micro Finance. Highlights of MoC:a) joint consultancy studies, b) productivity enhancement,

c) market linkages, capacity building, d) entrepreneurship development,

e) commercialization of India's rural sector in overseas market

technical assistance to micro and small-enterprises in the farm and non-farm sectors in
other developing countries,

Exim Bank along with BASIX to organise skill upgradation workshop for handloom
weavers in Mahabubnagar Mandal & for tussar silk weavers in Kosgi, Andhra
Pradesh

BASIX in association with Govt. of Rajasthan and UNDP is engaged in discussions for
developing export clusters in Rajasthan including Stone Carving and Dari Cluster in
Lawan, Dausa and Pottery Cluster in Basawa.

Exim Bank is engaged in helping the clusters in product development and establishing
export market linkages, organizing workshops and training programs for skill
upgradation of rural artisans.

Exim Banks Dubai ( formerly Budapest ) office helped in exporting sandstone slabs to
Hungary

Exim Bank has signed a Memorandum of Cooperation with Uravu (an NGO involved in
employment generation programs in the bamboo sector for tribal & poor families in
Waynad, Kerala) to provide larger visibility to bamboo-based handicraft products.
Highlights of MoC:-

Facilitate promotion of Uravu's or its associates' products in overseas market.

Identification of suitable buyers / partners by Exim Bank for facilitating export business
of Uravu and its associates.

Exchange of information on international markets for various products, technology,

trade, business and investing opportunities to facilitate increased co-operation for
commercial exploitation in overseas markets.

Conducting joint studies and research in areas of mutual interest

Exim Bank has initiated discussion with handloom weavers cooperative societies in
Fulia (West Bengal) for marketing their products overseas

National Institute of Fashion Design, Handloom & Handicraft Export Promotion Council
and Directorate of Handloom, Govt. of West Bengal participated in the discussions at
Exims office in Kolkata

One suggestion under discussion is to form a marketing company with equity

participation by the weavers co-op, West Bengal Govt. and Exim Bank which will take
up marketing of the products

Feasibility report under preparation by Indian Institute of Social Welfare & Business
Management, Kolkata

Exim Bank is also associated with rural knowledge centre of M.S.

Swaminathan Research Foundation for providing technology inputs to rural areas.

Recent Developments :

EXIMs focus on SMEs

Special Line of Credit from ADB: The Bank is negotiating a long term Line of Credit of
US$ 250 mn. From the Asian Development Bank, without Central Government
guarantee, for extending loans to SMEs . The Bank will have an option to draw the funds
in different currencies, as per the needs of its customers.

Innovative Programme for SMEs

The Bank has entered into a cooperation arrangement with International Trade Centre
(ITC), Geneva, for implementing a unique Enterprise Management Development
Services (EMDS) program, which is an IT based solution provider to enable small
enterprises to prepare business plans with international market in focus. This is a
pioneering initiative for supporting SMEs and for providing term loans and export
finance facilities to the identified units to help them in their globalisation efforts. The
Bank has partnered ITC in implementing this project. The Bank thus supports small
enterprises through capacity building and assistance in formulation of viable proposals. It
is envisaged that the learning from this programme would be transferred to other
developing countries, and thus assist in capacity creation and institution building in the
global arena.

The Bank has partnered the Commonwealth Secretariat in the Commonwealth

India Small Business Competitiveness Development Programme. The objective of the

programme is to undertake capacity development initiative that promotes economic
development (increased employment, investment, trade and economic activity) in
Commonwealth member states by providing

competitive strategies and policies on SME development to practitioners and policy

makers, and to build and develop institutional capacity.

ADFIAP Development Award

The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP)
Development Award recognises and honours ADFIAP member institutions, which have
assisted projects that have created a development impact in their respective countries.
Awardsare given to member institutions, which have implemented or enhanced
outstanding and innovative development projects during the year. The Bank has been
conferred the 2008 SME Development Award.

The Award is in recognition of the Banks Enterprises Management Development

Services (EMDS) programme, an IT based solution provider to enable small enterprises
to prepare business plans with international market in focus

Debt restructuring scheme for small and medium enterprises

Publications

Export Performance of Small and Medium Enterprises in India in research brief.

Occasional Paper: Institutional Support to SMEs A Study of Trade and Investment

Potential

Occasional Paper: Institutional Support Systems for SMEs in India and International
Experiences

FILM FINANCE

The bank has till date-sanctioned loans more than Rs 33.15 crores for film
production .the first three films financed by Exim bank has been commercially
successful across India and overseas market.

FILMS FINANCED BY EXIM BANK.

Honeymoon Travels Pvt. Ltd.

Kabul Express
Dhoom -2
Don - The Chase Begins Again

Fanaa
Bunty Aur Babli
Salaam Namaste
Veer Zaara

CONCLUSION
Established by the Government of India, we commenced operations in 1982 under the
Export-Import Bank of India Act, 1981 as a purveyor of export credit, mirroring global
Export Credit Agencies. With our rich pedigree, today we serve as a growth engine for
industries and SMEs through a wide range of products and services. This includes import
of technology and export product development, export production, export marketing, preshipment and post-shipment and overseas investment. In a rapidly shifting financial
landscape, we are a catalyst and key player in the promotion of cross border trade and
investment. By instilling a powerful culture of innovation and foresight, we help India
maximize its potential and meet and exceed its vision.

BIBLIOGRAPHY
WEBSITES
Exim Bank India website
www.scribd.com
www.ask.com

OTHER ARTICLES:
Role of exim bank in indian economy by A.G . Saudagar
EXIM POLICY by Indian foreign trade policy department