EXPORT IMPORT BANK OF INDIA
THE EVOLVING ROLE
By Y B Desai, Managing Director, Export Import Bank of India

Export Credit Agencies
Financial services are the mainstay of a robust economy and since the last century, exporting is one of the activities that require extensive financial assistance for its growth. Recognising the importance of the availability of adequate export finance, most countries of the world have set up specialised Export Credit Agencies (ECAs) to cater to the requirement of exporters. These agencies focus mainly on providing medium and long- term export credit, which are particularly important for the export of high value, high technology manufactured goods and project goods.

With increasing globalisation of the world economy, Export Credit Agencies around the world have augmented measures to facilitate and thereby promote exports. Today, many of the ECAs in the developed companies not only perform their traditional role of providing export credits but also offer a gamut of other products. The ECA act as an export financing institution, a commercial export insurer, a foreign investment catalyst and a project finance expert.

Export-Import Bank of India
(Exim Bank), an apex financial institutional institution, was established in 1982 under an Act of Parliament to finance, facilitate and promote India's international trade. The vision of Exim Bank 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 helping Indian companies to globalise.
The main objectives of the Bank can be delineated as under:

• To translate national foreign trade policies into concrete action plans
• To provide alternate financing solutions to the Indian exporter, aiding him in his efforts to be internationally competitive.
• To develop mutually beneficial relationships with the international financial community.
• To initiate and participate in debates on issues central to India's international trade.
• To forge close working relationships with other export development and financing agencies, multilateral funding agencies and national trade and investment promotion agencies.
• To anticipate and absorb new developments in banking, export financing and information technology.
• To be responsive to export problems of Indian exporters and pursue policy resolutions.

The need to utilise all possible financing mechanisms to promote export capabilities has motivated the Bank to go beyond pre and post-shipment credit, and operate schemes involving short-term export finance, investment loans and export marketing finance.

The Bank provides competitive finance at various stages of the business cycle, covering import of technology, export product development, export production, export marketing, export credit at pre-shipment and post-shipment stage, and investment overseas. Finance is provided in Indian Rupees and foreign currency.

Institutional Linkages
The Bank has five overseas offices at Washington D C, Singapore, Milan, Budapest and Johannesburg. The overseas offices are strategically located for enhancing institutional linkages with multilateral agencies viz., World Bank, International Monetary Fund, European Bank for Reconstruction and Development, Asian Development Bank, African Development Bank and regional banks like the PTA in Africa, and also interacting with various Export Credit Agencies. The overseas offices also assist Indian companies in identifying partners for business or joint ventures. Exim Bank has forged alliances with banks and trade and investment promotion agencies in 31 countries through 53 co-operation agreements and Memoranda of Understanding (MOU).

Exim Bank finances exports of Indian machinery, manufactured goods, consultancy and technology services on deferred payment terms. It also seeks to co-finance projects with global and regional development agencies to assist Indian Exporters in their effort to participate in such overseas projects. Companies can avail of facilities such as forfaiting, underwriting of issues, import finance through lines of credit from other Export Credit Agencies and bulk import finance for import of raw materials and intermediates. Equity finance is available for acquiring or setting up companies abroad for manufacturing, marketing, trading and other services. Companies can also avail finance from Exim Bank for export market development activities and for export product development. Companies collaborating for technology, particularly with companies from Asian countries can access concessional finance through Exim Bank under the ACIP programmes. Foreign governments and agencies in other developing countries are offered buyer's credit and lines of credit to import Indian goods and services. Exim Bank offers rediscounting and refinance facilities to commercial banks in India. It also participates in guarantees issued by commercial banks on behalf of Indian project exporters. Exim Bank also offers finance for setting up computer software training institutes and grant finance for product/process quality certification.

New Initiatives