EXPORT IMPORT BANK OF INDIA
The Export Import Bank of India was set up in 1982
under the Export-Import Bank of India Act, 1981. The
EXIM bank was set up as the apex institution
providing finance and refinance in connection with the
foreign trade of the country.
ROLL NO :-55
EXPORT IMPORT BANK OF INDIA
The Export Import Bank of India was set up in 1982 under the Export-Import Bank of India
Act, 1981. Since then it has been a catalyst as well as a key player in the promotion of cross-
border trade and investment. It has particularly helped the small and medium enterprises in
their globalization efforts, through import of technology, export product development, export
production, export marketing, pre-shipment, post shipment and overseas investment etc.
The EXIM bank was set up as the apex institution providing finance and refinance in
connection with the foreign trade of the country. It took over the operations of the
international finance wing of the IDBI. The objectives of this bank are clearly set out as,
granting loans and advances in India solely or jointly with commercial banks and other
financial bodies to persons exporting or importing or intending to export from India, goods
and services including export of turnkey projects, joint ventures and civil construction
Functions of EXIM Bank
Financing of exports and imports of goods and services not only into India but also in
Provision of financial assistance for exports/imports of machinery and equipment on
Small and Medium Enterprise: The group handles credit proposal from SMEs under
various lending programmes of the bank.
Extension of financial help for facilitating joint ventures.
Granting lines of credit to governments, financial institutions and other organizations
in foreign countries to enable persons in those countries to import from India, goods
including turnkey projects, services including consultancy services.
Issuing bid bonds or guarantees and other similar facilities in India or abroad solely or
jointly with commercial banks on behalf of persons exporting or intending to export
Assistance Provided by EXIM Bank
1. Funded assistance: Funded assistance involves financial outflow. It is provided to
Indian exporters to enable them to operate in international markets. It includes
provision of medium term credit to exporters, investment finance for equity
participation in joint ventures abroad, technology and consultancy services as well as
pre-shipment finance for export of capital goods under this scheme, loans are also
provided to foreign governments, companies and financial institution for purchase of
capital goods and services from India, as well as re-lending facilities for overseas
banks to enable them to provide term finance for import of goods from India. Loans
for export bills rediscounting and refinance of export credit are also provided to
2. Non-funded assistance: Non-funded operations include various types of guarantees
in association with Indian commercial banks, on behalf of Indian
exporters/contractors in favour of their overseas counterparts. These guarantees are
given in the form of bid bonds, advance payments and performance guarantees and
guarantees for raising finance abroad.
Export, Import and Balance Payments from 1990-91 to 2009-10
In the above Table, in 1990s, the export growth was subject to wide ranging
fluctuations. For example Exports grew by 20.8% and also dipped to -5.1% in 1998-99. The
decade of 1990s, 1991-92 and 1998-99 showed negative growth rate in exports. On an
average, export growth was 13.33% per annum. On the other side, imports grew by 10.93%
per annum and only during 1991-92 it showed negative growth rate of 19.4%. Otherwise, the
import growth rate varied between 2.2 to 2.8%. The balance of deficit increased
continuously. One important fact that needs to be noted is that the base of the imports and
exports enhanced considerably during the decade of 1990s along with considerable
diversification in both exports and imports commodity baskets.
The year 2001-02 and 2009-10 saw negative growth rates, however between 2001-02 and
2004-05. Exports on annual average grew by 13.88%, with over 30% growth in 2004-05.
Similar was the case with imports. The average annual growth rate was 13.73% from 2005-06
to 2007-08, exports increased in the vicinity of 25% per annum and the imports grew much
higher that was over 31% per annum. However, the gap between exports and imports
widened and pushed the balance of trade deficit in the current account of balance of trade.
The deficit in the balance of payment began in 1995-96 and reached an alarming proportion
of US$ 12.85 billion in 1999-2000. Even in the recent growth in exports is due to an increase
in factor productivity, rise in the world trade, increased in intra-industry trade and not due to
the external and imports to GDP was 10.70% in 2000-01 and has risen to 13.79% in 2009-10.
Similarly, imports increased from 12.4% to 22.24% in respective years. The exports growth
received set back in 2009-10 due to world-wide recession and fall in commodity prices for
which was a main exporter. This underlines an increased integration of Indian economy with