Exim Bank's capital to increase five-fold to Rs 10,000 cr

NEW DELHI: The Cabinet on Wednesday approved draft amendments to a law governing the Exim Bank, proposing an increase in its authorised capital from Rs 2,000 crore to Rs 10,000 crore.

Besides, the Export Import Bank of India (Amendment) Bill, 2011 proposes appointment of two whole-time directors, other than the Chairman and Managing Director. The government will take the amendment bill to Parliament in the near future.

The Exim Bank, which plays a vital role in financing of export and import deals, is governed under the Export-Import Bank Act, 1981.

"Increase in the authorised capital would enable the bank to take higher export credit exposures and enable it to borrow funds to disburse under export line of credits," an official statement said after the Cabinet meeting.

The bill also seeks to empower the Central government to further increase the authorised capital of the Exim Bank without any more legislative changes.

By appointing two whole time directors, the management structure of the bank would be strengthened, it said.

Exim Bank was set up as a corporation in 1982 under the Export Import Bank of India Act, 1981 for providing financial assistance to exporters and importers.

It also functions as the principal financial institution for coordinating the working of different institutions in export financing and import of goods and services.

During 2010-11, 22 Letters of Credit (LoC) aggregating USD 2.38 billion were given by the Exim Bank to support export of projects, goods and services from India.

As on March, 2011, the Bank has a credit commitment of USD 6.66 billion covering 72 countries in Africa, Asia, CIS, Europe and Latin America.

Source: EconomicTimes