INTERNATIONAL TRADE FINANCE

Assignment

Submitted by –
Saikat Saha
MBA (FINANCE) A
Roll - 44

EXIM Banks: Functions and Roles

Export Import Banks (EX-IM Banks) refer to government or semi-government bodies

that ensure the safety and growth of foreign trade in a country. These banks are solely
focused on the foreign trade and are not involved in the within county transactions. The
EXIM Banks provide the exporters with customized instruments to safeguard their interest in
an event of non-payment or default by the importers. Therefore, facilitating easier financing
for foreign trade is the major function of these type of banks.

EXIM Bank of India was founded in 1982 as per the Export-Import Bank of India
Act, 1981 and since its inception has been a major facilitator in promotion of foreign trade
and investment. Over the years the EXIM Bank has played a major part in promoting the
small as well as medium scale Indian industries in globalisation efforts.

ORGANISATION –

The Board of Directors consists of a chairman, a managing director, two deputy

managing directors; one director each nominated by the Reserve Bank of India; IDBI Bank
Ltd. and ECGC Ltd.; and not more than 12 directors nominated by the Central Government
of, whom 5 directors are Central Government officials; not more than 3 directors are from
commercial banks; and up to 4 directors are professionals with experience in export / import
or financing.

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OBJECTIVES –

a. To ensure the integrated and co-ordinated approach in solving problems

encountered by Indian companies engaged in the export business.
b. To pay specific attention to the exports of capital goods.
c. Export projection.
d. To facilitate and encourage the export of technical services and joint ventures.
e. To extend buyers’ credit and lines of credit.
f. To tap domestic and foreign markets for resources for the development of the
Indian export sector.

FUNCTIONS –

a. It provides financial assistance to exporters of plant, machinery and related

products and services in the form of term-credit.
b. Underwriting the issue of shares, stocks, bonds and debentures of companies
involved in export business.
c. The bank gives overseas buyers credit for import of Indian capital and related
goods.
d. Developing and financing export-oriented industries.

ROLE of EXIM BANK IN INTERNATIONAL TRADE –

a. Foreign Buyer’s Credit – The foreign buyers are entitled to financial assistance
to facilitate the import of goods and services on deferred payments.
b. Line of Credit – The bank offers financial assistance to the overseas financial
institutions and various government bodies for import of goods and services from
India.
c. Re-loaning Options to Foreign Banks – The foreign banks are entrusted with
funding from the EXIM Bank to provide the same to their clients across the globe
for the import of Indian goods and services.

SCHEMES & SERVICES TO PROMOTE INTERNATIONAL TRADE –

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a. Production Equipment Finance Programme – Under this programme, the bank
finances capital expenditure of export-oriented units. It is structured as an
umbrella arrangement under which various equipment’s, imported and indigenous
can be financed.
b. Marketing Advisory Services – Through this scheme the bank looks to
strengthen the export capabilities and internal competitiveness of Indian
companies. It helps Indian exporting organisations in their globalisation efforts by
assisting them in identifying foreign partners, distributors and buyers for their
products and services. It also helps the Indian companies in identifying
opportunities to set up business abroad or in the acquisition on foreign companies.
c. Export Advisory Services – The Export Advisory Services Group offers a
diverse range of information, advisory and support services, which enable
exporters to evaluate international risks, exploit export opportunities and improve
competitiveness. Value added information and support services are provided to
Indian projects exporters on the projects funded by multilateral agencies.