exim bank project
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INDE
XPage
Serial No. Topic No.
1 INTRODUCTION 1
2 OBJECTIVES OF EXIM BANK 23 EXIM BANK ACT 3
4 OFFICES 4
5 GENERAL GUIDELINES ON EXIM 6
LINES OF CREDIT (LOCS)
6 DIFFERENT LENDING PROGRAMMES 9
7 FINANCE 13
8 SMALL AND MEDIUM ENTERPRISES 16
FINANCE
9 PERFORMANCE 20
10 BIBLIOGRAPHY 28
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INTRODUCTIO
N
1. The Export-Import Bank of India (Exim Bank) is a public sector financial
institution created by an Act of Parliament, the Export-import Bank of India Act,
1981.
2. The business of Exim Bank is to finance Indian exports that lead to
continuity of foreign exchange for India.
3. The Bank's primary objective is to develop commercially viable
relationships with a target set of externally oriented companies by offering them
a comprehensive range of products and services, aimed at enhancing their
internationalization efforts.
4. There are apex institutions in the country, which deal with major economic
activities, viz. industry, agriculture and foreign trade.
5. The Industrial Development Bank of India extends term industrial loans; the
National Bank for Agricultural loans; and the Exim Bank extends term loans for
foreign trade.
6. All these institutions are wholesale banks. They, therefore work closely
with commercial banks and other state level financial institutions that operate the
retail banking system in the country.
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OBJECTIVES OF EXIM
BANK
The Export-Import Bank of India was established for providing financial
assistance to exporters and importers for functioning as the principle institution
for co-ordinating the working of institutions engaged in financing export and
import of goods and services with a view to promoting the countrys
international trade
:The Export-Import Bank of India Act, 1981
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EXIM BANK
ACTCompleted 23 years of operations in March 2005
Set up by an Act of Parliament in September 1981
Commenced operations in March 1982
Wholly owned by the Government of India
Export-Import Bank of India was set up for the purpose of financing,
facilitating and promoting foreign trade in India
Exim is the principal financial institution in the country for co-ordinating
working of institutions engaged in financing exports and imports
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OFFICES
Head office -Mumbai
Domestic Offices :
Ahmedabad, Bangalore, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai,
New Delhi, Pune.
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Overseas Offices :
Budapest, Johannesburg, London, Singapore, Washington DC.
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GENERAL GUIDELINES ON
EXIM LINES OF CREDIT
(LOCS)
Introduction :
Exim Bank extends Lines of Credit (LOCs) to overseas financial institutions,
regional development banks, sovereign governments and other entities
overseas, to enable buyers in those countries, to import goods and services from
India on deferred credit terms. The Indian exporters can obtain payment of
eligible value from Exim Bank, without recourse to them, against negotiation of
shipping documents. LOC is a financing mechanism that provides a safe mode
of non-recourse financing option to Indian exporters, especially to SMEs, and
serves as an effective market entry tool.
How does it work?
1. Exim Bank signs LOC Agreement with overseas Borrower Institutions
(Borrower) and announces the availability of LOC for utilization, when the
Agreement becomes effective.
2. Exporter checks with Exim Bank, available amount under the LOC and
quantum of service fee payable to Exim Bank and negotiates contract with
Importer.
3. Importer approaches the Borrower for approval of the contract.
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4. Borrower appraises the proposal. If satisfied, approves the contract and
refers to Exim Bank for concurrence for inclusion of contract for being financed
under the LOC.
5. Exim Bank accords approval to the contract, if in conformity with the
terms of LOC. Exim Bank conveys contract approval to the exporter and the
Borrower.
6. The Importer arranges remittance of advance payment to the Exporter and
also opening of a Letter of Credit, which states that the contract is covered under
Exim Bank's LOC to the Borrower and reimbursement will be by Exim Bank for
the Eligible Value of Credit.
7. Exporter executes the contract/ships the goods/provides services.
8. Commercial bank in India, designated as the Negotiating Bank, negotiates
shipping documents and pays the exporter.
9. Exim Bank reimburses the Negotiating Bank, on receipt of valid claim and
service fee, by debit to the LOC account of the Borrower.
10. Borrower repays Exim Bank on due dates.
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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.
General
Exporters are advised to check with Exim Bank before finalizing the
contracts with the buyers, details of service fee and other charges, if any,
payable by the exporters on the contracts to be covered under the relative LOC.
General Verification :
Exporters are advised to check with Exim Bank before finalizing the contracts
with the buyers, details of service fee and other charges, if any, payable by the
exporters on the contracts to be covered under the relative LOC.
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DIFFERENT LENDING
PROGRAMMESLending Programme For Export Oriented Units :(i)
Motto of this programme is to Create and enhance export capabilities of
Indian companies.
(ii) Production Equipment Finance Programme (PEFP) :
Under this program Exim Bank seeks to finance non-project related
capital expenditure of export oriented units. PEFP is structured as an
umbrella arrangement under which various equipment, imported and
indigenous, can be financed, thus obviating the need to arrange finance for
every such procurement. It is not necessary to identify specific equipment
sought to be financed at the time of application; this could be done at the
time of disbursement.
(iii) Overseas Investment Finance (OIF) :
Under this program finance equity loan to Indian companies for setting up
of overseas joint ventures/ wholly owned subsidiaries.
(iv) Equity Investment In Indian Ventures Abroad :
This program develops overseas investment by Indian companies to
enhance visibility of Indian overseas ventures.
(v) Asian Countries Investment Partners Programme (ACIP) :
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This program promotes joint ventures in India between Indian companies
& companies from Asian countries through four facilities that address
different stages of the project cycle. ACIP seeks to catalyse investment
flows into India by creating of Joint Ventures in India between Indian
companies and companies from East Asian countries. ACIP is proposed to
be a funding instrument providing finance at various stages of a Joint
Venture project cycle viz. sector study, project identification, feasibility
study, prototype development, setting up project and technical, managerial
assistance.
(vi) Export Marketing Finance Programme (EMFP) :
This program create and enhance export capabilities and international
competitiveness of Indian companies. Under the lending programme for
Export Marketing Finance, the Bank addresses the term finance
requirements for a structural and strategic export marketing and
development effort of Indian companies.
(vii) Export Product Development Programme (EPDP) :
This program is to support systematic export product development plans
with focus on industrialized markets and Eligible Companies.
(viii) Programme For Financing Export Vendor Development (EVD) :
This program there is to finance export strategic vendor development
plans for export companies with a view to enhancing exports through
creation, strengthening of backward linkages with vendors.
(ix) Programme For Export Facilitation (PEF) :
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Under this Exim Bank offers term finance and non-funded facilities to
Indian corporates to create infrastructure facilities to facilitate India's
international trade & thereby enhance their export capability
(a) Financing Port Development :
This programme is there to finance development of minor ports with
related infrastructural activities which would facilitate India's international
trade.
(b) Lending Programme for Software Training Institutes :
The programme seeks to address the perceived constraint in availability of
trained high-end software professionals to support the fast growing
software exports. The programme aims at financing the establishment /
expansion of software training institutes.
(x) Foreign Currency Pre-Shipment Credit (FCPC) :
Under this programme, short-term foreign currency finance is available to
eligible exporters for financing inputs for export production such as raw
materials, components and consumables. The finance is repayable in
foreign currency from proceeds of the relative exports.
FCPC programme represents another funding source to the exporter for
expanding export volumes, particularly of manufactured and value added
goods. It eliminates two-way exchange conversion costs and exchange
risk, thus enhancing export competitiveness. FCPC can be a cost effective
funding source as compared to rupee export credit as well as overseas
supplier's credit depending on market conditions for loans under FCPC.
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As far as commercial banks are concerned, loans availed of from Exim
Bank are exempt from Cash Reserve Ratio, Statutory Liquidity Ratio and
Incremental Credit-Deposit Ratio requirements.
(xi) Working Capital Term Loan Programme For Export Oriented Units
(WCTL) :
WCTL programme seeks to create, enhance export capabilities of Indian
companies.
(xii) Bulk Import Finance Programme (BIF) :
To provide short term working capital finance to manufacturing
companies to excess consumable inputs
(xiii) Programme For Financing Research & Development :
To provide integrated financing for Research & Development activities by
export oriented companies
(xiv) Long Term Working Capital Programme For Export Oriented Units :
To provide finance for long term working capital
(xv) Import Finance :
To provide finance for import of capital goods/plant and machinery,
technology/know-how
Exim Bank's finance available to Indian manufacturing companies
Term loans in Indian rupees / foreign currency
AND MANY MORE PROGRAMMES.
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FINANC
E
Guidelines on Project & Services Exports :
Issued by RBI under Sec. 47 of Foreign Exchange Management Act, 1999
Types of Exports covered :
Export of Goods on Deferred Payment Terms (e.g. Export of machinery,
equipment, manufactured products)
Turnkey Projects (e.g. Setting up of Sugar Plant, Cement Plant)
Construction Projects (e.g. Construction of Roads, Dams, Bridges)
Consultancy & Technical Services (e.g. Operation & Maintenance
Contracts) collectively referred to as 'PROJECT & SERVICES EXPORTS'
On Deferred Payment Terms :
For any amount : Working Group
In-principle commitment at Bid Stage :
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While dispensing with the requirement of pre-bid clearance of project
export proposals vide it's A.D (M.A. Series) Circular No. 9 dated May 5, 2000,
RBI has advised exporters to ensure, in their own interest, that conditions as
laid down in Memorandum PEM for submission of bids are compiled with.
Project exporters, at the time of submission of bids/offers for execution of
project/export contracts overseas, seek in-principle commitment from Exim
Bank and other banks for post-award facilities at to ensure proper tie-up of
facilities.
Exim Bank issues guarantees required for execution of project export
contracts trough overseas banks or directly favoring overseas clients.
Exporter submits application in prescribed from along with copies of
contract through his commercial bank for Post Award Clearance.
Exporter can directly approach Exim Bank for proposals of value limits
upto Rs.200 crores.
On receipt of application and contract copies from the commercial bank,
EXIM Bank approves the proposal if the same falls within its delegated powers
or convenes Working Group meeting.
In approved cases, Exim Bank/Working Group accords clearance to the
final terms and conditions of the contract including various fund based and non-
fund based facilities and requisite exchange control approvals.
On the basis of package post award clearance granted by Exim
Bank/Working Group, final approvals for fund based and non-fund based
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facilities and requisite exchange control approvals are issued by the concerned
institutions and export's bank(s).
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Small and Medium Enterprises
Finance
Handmade Paper Bags
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.
Dried Flowers
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 endeavoring 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
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export business on success fee basis, countries/ sector information
dissemination etc. and financial advisory services such as loan syndication, etc.
EXIM Banks Services :
Gift Articles made with Handmade Paper
The SME sector can avail of a comprehensive range of products and
services that Exim Bank offers. Broadly, these can be classified into three
categories:
Export Credit:
Exim Bank provides pre shipment and post shipment credit in Indian
rupees and foreign currency. Finance is extended for short term i.e. upto 6
months as also for medium/long term i.e. beyond 6 months for eligible products
and projects. Certain RBI guidelines apply for such medium/long term export
credit.
Hammocks made out of cork and cotton ropes
Finance for Export Oriented Companies
Exim Bank offers loans for financing Export Oriented Companies
which may be categorized as under:
Project Finance
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Finance for new projects, expansion, modernization projects.
Finance for purchase of equipment both imported as well as indigenous.
Working Capital both short term as well as medium term.
Overseas Investment Finance
Export Marketing Finance (Finance for developing strategic forward
linkages) :
Term loans are extended to important strategic marketing plan covering
inter-alia, overseas market research, participating in international trade fairs,
promotion of product, brand positioning, international quality certification, mirror
product adaptation, pre-operative expenses for overseas offices, prospective buyers
visits to India, etc.
Export Product Development:
Term Loan for product adaptation, pilot plants, product/process
development, etc.
Finance for Research & Development:
Exim Bank also provides lending for Research & Development activities
for facilitating exports.
Advisory Services:
Exim Bank offers advisory services to Indian exporters for facilitating
forward linkage for agri exports. Exim Bank's international network comprising
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overseas office, co-operation partners, correspondent banks and financial
institutions is leveraged to provide export information on:
Overseas markets/market segments.
Direct marketing of product.
Overseas business opportunities.
Information on export/import regulations, finance, etc.
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PERFORMANC
E
Business Performance
Export Contracts supported by Exim Bank amounted to Rs. 7945
crores, highest ever in value terms.
Loan Sanction : Rs. 15853 crores, an increase of 71%.
Disbursements : Rs. 11435 crores, an increase of 64%.
Loans Assets : Rs. 13410 crores, an increase of 24%.
Total Assets of the Bank exceed Rs. 18000 crores.
Guarantee Sanctions : Rs. 1589 crores.
Guarantees Issued : Rs. 1660 crores.
Lines of Credit amount to US$ 423 million .
Financial Performance
Net profit at Rs. 258 crores, an increase of 13%.
Net worth of the Bank increased to Rs. 2512 crores from Rs. 2143
crores.
Dividend to Government of Rs. 65.44 crores as compared to Rs. 47
crores in the previous year.
Capital to Risk Assets Ratio (CRAR) STOOD AT 21.58%.
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Net NPAs to net loan assets decreased to 0.85% as on March 31,
2005 from 1.26% as on March 31, 2004.
3. New initiatives
Financing of Service Sector
Services sectors financed during the year included entertainment,
health care, hospitality and shipping.
During the year, loans were extended to there companies in the
entertainment industry, engaged in film production . Of the seven films
financed by the bank during the year.
Exim Bank 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:
1. Poverty reduction through export linkages.
2. Benefit of globalization to grassroots rural enterprises.
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Finance against securitization of receivables for import and supply of
telecom equipment.
Performance guarantee on behalf of a company in the steel sector, to
enable it to access international finance.
Overseas Investment Finance Programme
During the year, eleven corporates were sanctioned funded and non-
funded assistance aggregating Rs. 548 crores for part financing their overseas
investment in seven countries.
Exim bank has provided finance to 122 ventures set up by over 100
companies in 43 countries so far.
Aggregate assistance extended for overseas investment amounts to Rs.
1888 crores.
Overseas investments financed by Exim Bank during the year include:
o acquisition of a stainless steel plant in Indonesia.
o acquisition of a BPO services company in USA.
o acquisition of a pharmaceutical company in Denmark.
o Finance for setting up a consumer dealer network in UK.
o acquisition of an auto ancillaries unit in the USA, with both and equity
support.
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Agri Business Group
Exim bank has identified agri-exports as a focus area and has
established an Agri Business Group which aims to facilities, promote
and finance agri business having export potential.
Sanctions and disbursements of the Agri Business Group during the year
2004-05 aggregated Rs.582 crores and Rs.495 crores respectively.
Banks finance to the agri sector during the year included term finance
for food producing, floriculture, fruits and vegetables and contract
farming sectors.
Export finance for a wide range of agro-based products including
basmati rice, wheat, sugar, coffee, maize, cattle feed, groundnut kernels,
herbal extracts, cashew, sesame seeds, mushrooms.
Export markets for above mentioned products included USA, Japan,
Korea, Singapore, South Africa and UAE.
Exim bank has strengthen its linkages with relevant organisation in the
sector such as NABARD, APEDA, Agriculture Finance Corporation
Ltd., Central Food Technological Research Institute, National
Horticultural Board and Small Farmers Agri Business Consortium
which help to leverage their respective strengths with a view to future
augmenting exports of agricultural products from India.
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4. AWARDS
The bank has been conferred with the 2005 trade development award.
The award is in the recognition of the banks export marketing services
programme that proactively creates the enabling environment for Indian
firms to explore newer geographies leveraging upon banks extensive
institutional and trade linkages, its reach, access and credibility to serve
as the marketing arm of select Indian companies effectively utilizing the
banks overseas offices. The bank had been conferred with this award in
the years 2002 and 2004 also.
The ADFIAP Awards Board this year has also bestowed upon the
Chairman and Managing Director of Exim bank, a special Plaque of
Merit in recognition of his leadership role in moulding the bank into a
dynamic and innovative organisation, contributing to indias trade with
the world.
5. Business for the year
Contracts secured
During the year,570 export contracts aggregating Rs7945 crores
covering 64 countries were secured by 198 Indian exporters with Exim
banks support as against 164 contracts valued at Rs7543 crores covering
48 countries secured by 96 Indian Exporters during the previous year.
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Profit
Profit before Tax stood at Rs. 314 crores as compared to Rs. 304 crores
during the previous year.
The profit after Tax amounted to Rs. 258 crores as compared to Rs. 229
crores during previous year.
Bank has made a provision of Rs. 56 crores towards income tax.
Net wroth of the Bank increased to Rs. 2512 crores from Rs. 2143
crores.
Dividend
Rs. 65.44 crores will be paid to the Central Government as dividend for
2004-05, as compared to Rs.47 crores for 2003-04.
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Bibliography
http://www.eximbankindia.com/business.html
http://www.eximbankindia.com/services.html
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