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Saturday, February 2, 2013

India to be No 1 market for US Exim Bank this year

The US Exim Bank said India will overtake Mexico to emerge as the biggest market by its fund commitments this year.

"If I had to guess, this year ... sometime this year, if we use the new ICICI Bank credit-line swiftly, then even sooner (India will become the biggest market for us in terms of fund commitment)," US Exim Bank Chairman and President Fred P Hoghberg told reporters here.

The US Exim Bank, which supports importers in foreign countries typically through credit lines to support job growth at home, already has USD 8.5 billion in commitments towards India, Hoghberg said.

In commitments, India stands second only to Mexico's USD 8.7 billion currently, he said, adding the allocation towards India has more than doubled in the past five years.

The export development finance bank today signed an agreement for a USD 500-million credit-line with ICICI Bank, which will have a focus on lending to small and medium businesses and infrastructure needs.

The bank is looking to fund projects in the air transportation, infrastructure and power sectors for growth in India and also analysing the potential presented by other sectors like freight locomotives, the chairman said.

Getting to the operational specifics and reservations, Hoghberg said the bank wants to be treated at par with any other Indian lender in making recoveries.

"There is a local law called Sarfesi Act, but we are not coming under its ambit and that is a concern. We have been working with the government here for quite some time to get covered under the Sarfesi Act so that we are on the same platform as other banks but we have still not received that," Hoghberg rued.

The bank has been liaising with the finance ministry and the sector regulator Reserve Bank for a movement on the request, he added.

Hoghberg, however, stressed that the asset quality here is good and that it currently has other recourses of recovery.

Globally, the US Exim Bank operates below the mandated 2 per cent delinquencies level, he added.

Source: Economic Times


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