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EXIM BANKExport-Import Bank of India.

Presented By:-

1. Anand Singh.

2. Chetan Patil.

3. Faylena Thomas.4. Tejas Joshi.

5. Rounak H.

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Companyprofiley

Type: Public

y Industry: Banking and financial services

y Founded: 1982

y Headquarters: Mumbai, India

y Products: Investment banking, Commercial

banking, Retail banking, Private banking, mortgages

Asset management, Credit cards

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Introduction The Export-Import Bank of India, also known as Exim Bank of India, is the

leading institution for financing exports and imports.

Set up in March1982 under the Export-Import Bank of India Act 1981.

Exim Bank is fully owned by the Government of India.

Launched with an aim to augment exports from India and also to combine the

country's foreign trade and investment with the overall economic growth.

Began its operations as a supplier of export credit, over the period, evolved into

an institution that helps Indian companies in their export and import activities

by offering a broad variety of products and services.

The Exim Bank's focus is on export of manufactured goods, project exports,

exports of technology services and exports of computers software.

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ObjectiveThe primary objective of the Export-Import Bank of India

for providing financial assistance to exporters and importers, and for functioning as the

principal financial institution for coordinating the working of institutions engaged infinancing export and import of goods and services with a view to promoting the countrysinternational trade

shall act on business principles with due regard to public interest

: The Export-Import Bank of India Act, 1981

y

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Vision

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Exim Bank is managed by a Board of Directors, has representatives from

the Government, Reserve Bank of India, Export Credit Guarantee

Corporation of India(ECGC), public sector banks, and the business

community.

Shri R.C. Shah, a seasoned banker, with vast commercial and international

banking experience first Chairman and Managing Director of Exim Bank

during January 1982-January 1985.

His vision helped the setting up of the institution as a unique organizational

model, with a flat, non-hierarchical culture, multi-disciplinary approach to

problem solving, access to the latest technology and a climate for innovation.

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Shri T.C.A. Rang anathanChairman And Managing Director

Directors

Dr. Rahul K hullar

Secre tary

Government of Ind ia ,

Minis t ry of Commerce & Indus t ry,

Depar tment of Commerce

Dr. Kaushik Basu

Chief Economic Adviser

Government of India,Ministry of Finance

Shri Raj inder Pal S ingh

Secretary,Government of Ind ia ,

Minis t ry of Commerce & Indus t ry,

Depar tment of Indus t r ia l

Pol icy & Promot ion

Smt. Ravneet Kaur

Joint Secretary (IF),

Government of India,

Ministry of Finance,

Department of Financial Services

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INITIATIVES Exim has been the prime mover in encouraging project

exports from India.

The Bank extends lines of credit to overseas financialinstitutions, foreign governments and their agencies.

The Banks Overseas Investment Finance programme offers avariety of facilities for Indian investments and acquisitions

overseas. Loan to Indian companies.

Direct participation of Exim bank in equity.

Non funded facilities such as line of credit and guarantee.

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Contd..

The bank provides financial assistance by way of term loans in Indianrupees/ foreign currency for setting up new production facility and foracquisition of production equipment/technology.

Under its Export Marketing Finance programme, Exim Bank supportsSmall and Medium Enterprises in their export marketing effortsincluding financing the soft expenditure.

The Bank has launched the Rural Initiatives Programme with theobjective of linking Indian rural industry to the global market.

Exim Bank supplements its financing programmes with a wide rangeof value-added information, advisory and support services..

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y Exim Bank plays four-pronged role with regard to India's

foreign trade: those of a coordinator, a source of finance,

consultant and promoter.

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Services: For Indian companies executing

projects overseas.- Export Credits

- Finance for Export Oriented

Units

- Overseas Investment Finance

- Lines of Credit

- SME & Agri Finance

- Film Finance

- Rural Initiatives

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ExportCredits Pre-shipment credit:- Exim Bank's Pre-shipment Credit facility, in Indian

Rupees and foreign currency, provides access to finance at the manufacturing stage.

For Project Exporters:-Indian project exporters incur Rupee expenditurewhile executing overseas project export contracts i.e. costs of

mobilisation/acquisition of materials, personnel and equipment etc.

For Exporters of Consultancy and Technological Services:-Exim Bank offers a

special credit facility to Indian exporters of consultancy and technology services, so

that they can, in turn, extend term credit to overseas importers.

For commercial Banks:-Exim Bank offers Rediscounting Facility to commercial

banks, enabling them to rediscount export bills of their SSI customers, with usance

not exceeding 90 days.

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Overseas

investmentF

inance Finance for Indian Company's equity participation in the

overseas.

Finance (for equity/debt component) for acquisition of

overseas businesses / companies including leveraged buy-outs including structured financing options .

Direct Equity by Exim Bank in the overseas JV/ WOSof an Indian Company .

Manufacturing facility of 'Advanta Semillas',

Argentina, a company producing hybrid seeds of

sunflower, corn, sorghum etc. Mumbai based United

Phosphorus, with support from Exim Bank, has

acquired Advanta which has similar facilities in

Australia and Thailand, in addtion to Argentina 13

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Agri Finance The globalization and post-WTO scenario offers considerable

scope for exports of Indian agricultural products.

Financial assistance is provided by way of term loans, pre-shipment/post-shipment credit, overseas buyers' credit, bulk

import finance, guarantees etc.

The Bank has strong linkages with other stakeholders in agrisector such as Ministry of Food Processing, NABARD,

(SFAC), National horticulture board.

E.g.:- 1. Tuna Export. India's current export marketfor tuna comprises of more than 15 countries.

2. L0w Cost Irrigation.

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Filmfinanceinexport

The Bank has till date sanctioned loans more than Rs33.15 corers for film production.

y N

ature ofF

inance Cash flow financing for film production

Cash flow financing for film distribution/exhibition inoverseas markets

y

Term loans for fixed assets finance

Term financing for export market development

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Film

industry

y The Indian film industry is an integral part of the Indian

socio-economic psyche and the most popular source of

entertainment in the country.

y Film industry is the world's biggest film industry in termsof the number of movies produced and released in a year.

y In 2004, there were 934 films certified across, with Hindi

accounting for 245 of them.

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Filmsfinancedby Exim Bank:

y Fanaa

y Kabul Express

y Dhoom -2

y Don..

y And many more..

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Ruralinitiatives.y Exim Bank believes that there is a strong linkage between

export development and poverty reduction.

y Globalisation will be successful and acceptable only ifbenefits reach the rural population.

y Rural enterprises suffer from various handicaps includingimage, quality, capacity, pack NGOs and SHGs are thefront for rural enterprises.

y Through proper guidance and support, rural grass rootenterprises can access the global market and realize betterprices for their products thereby contributing to povertyreduction aging, delivery, etc.

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Export Oriented Units (EOUs):

y Units that export 100% of their production enjoy the status of

Export Oriented Units and its benefits thereof.y Need for higher level of technological and industrial progress

made Government devise a series of export promotional

schemes known as EOU scheme.

y

Provides an internationally competitive duty free environmentcoupled with better infra-structural facilities for export

production.

y Have become dominant players in our export strategy with a

share of about 10% in the countrys export performance.19

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FINANCE FOR EOUs:

y Term Finance: Finances provided by EXIM bank for fixed

tenures for various purposes. It includes :

y Project Finance

y Equipment Finance

y Import of Technology & Related Services

y Domestic Acquisitions of businesses/companies

y Export Product Development/ Research & Development

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Contd

y Working Capital Finance: Finances provided by EXIM

bank to different EOUs for conducting its operations efficiently.

It includes:y Short term Working Capital loans (< 2 years)

y Long term Working Capital loans (upto 5 years)

y Export Bills Discounting

y Cash Flow financing

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SMEs:y Significant contribution in Indian economy.

y Generates employment, contributes to national output and

exports.

y Increases trade, creating new entrepreneurship ventures.

y Provides depth to the industrial base of the economy.

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But,y SMEs require business advisory services-

y To enhance their international competitiveness in a highly

competitive globalising world.

y Services of reputed national and international consultants

are not cost effective and also, not adequately focused.

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Thus,

y EXIM bank provide a suite of services to its SME clients.

y

providing business leads.y handholding in winning an export contract, assisting in

generation of export business.

y information dissemination.

y

capacity building in niche areas such as quality, safety,export marketing, etc.

y financial advisory services.

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Lines of Credit (LOCs):

y Any credit source extended to a government, business

or individual, by a bank or other financial institution.

y Extends LOCs to overseas financial institutions, regionaldevelopment banks, sovereign governments and other

entities overseas.

y Enable buyers in those countries, to import goods and

services from India on deferred credit terms.y Indian exporters can obtain payment of eligible value from

Exim Bank, without recourse to them, against negotiation

of shipping documents.

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Procedural flow chart:1. Exim Banksigns agreement with Borrower and announces when effective.

2. Exporter checks procedures and Service fee with Exim Bankand negotiates contract with

Importer.3. Importer consults borrower and signs contract with exporter.

4. Borrower approves contract.

5. Exim Bankapproves contract and advises borrower and also exporter and commercial bank.

6. Exporter ships goods.

7. Commercial banknegotiates shipping documents and pays exporter.

8. Exim Bankreimburses Commercial bankon receipt of claim by debit to borrower.

9. Borrower repays Exim Bankon due date. 26

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Criteria forConsideration forClearance of ExportProposals:

y Exporter's financial position, track record

y Status of overseas client - Government/ Private

y Break-up of contract value - Indian / Third Country / Local

Risk Assessment of Buyer's Country

y Estimates of Cost and Profitability

y Currency of Payment - Convertible Currency / Local Currency

y Security : Letter of Credit, Bank Guarantee, GovernmentGuarantee, Externalisation undertaking of central bank

y Foreign Exchange Outgo

y Facilities required by the exporter

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Salient Parameters ofAppraisal forClearance of Export

Proposals:

y Payment Terms : Advance Payment, Progress / Down Payment,

y Security : Letter of Credit, Bank Guarantee, Government Guarantee,Externalisation undertaking of central bank

y

Availability of ECGC Cover, where necessary

y Important Contractual Clauses :

1. Pre-shipment Inspection

2. Arbitration

3. Status of Exporter : Prime Contractor/Sub-contractor/

Consortium Member4. Penalty / Liquidated Damages for delay in Contract Execution.

5. Price Escalation.

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y Source of Funding : Multilateral / Local

y Facilities required by the exporter.

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RecentNews:

y EXIM Bank of India extended a US$ 60 million line of credit to Myanmar

for financing of railway projects.

y These projects will be executed by the Indias state-owned RITES Ltd. Thiswas announced by Mr. U Soe Tha, Minister for National Planning &

Economic development of Myanmar, after the signing of a Memorandum of

Understanding (MoU) by Mr. T C A Ranganathan, Chairman & Managing

Director, EXIM Bank and Mr. Nyi Phyu Hla, Managing Director, Myanmar

Foreign Trade Bank at Federation House .y EXIM Bank has so far extended several lines of credit to Myanmar

aggregating US$ 250 million for a variety of projects such as railways,

telecom, refinery, truck assembly plant and electricity transmission lines in

Myanmar.

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y The Myanmar Government was encouraging the involvement of the private

sector in a big way. For instance, the government was supporting the setting

up of private banks and had begum privatization of petrol filling stations.

y Minister Tha said that about 400 foreign enterprises from 31 countries were

doing business from and with Myanmar, accounting for an investment of

US$ 23 billion. In contrast only 5 Indian companies were present in the

country with an investment of US$ 200,000.

y The new areas for cooperation were identified as construction, development

of hydropower and manufacturing in Myanmar.

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