EXECUTIVE SUMMARY

The Export-Import Bank of India (Exim Bank of India) is Indias national Export Finance Institution, fully owned by the Government of India. The Bank is engaged in financing, facilitating and promoting Indias two-way international trade and investment, and seeks to enhance the international competitiveness of Indian enterprises. Recognizing the dynamics of international trade, Exim Bank of Indias vision has evolved beyond providing export credit to a conscious, systematic effort at creating international competitiveness capabilities by arranging competitive finance and services at all stages of the business cycle.

Export-Import Bank of India is the premier export finance institution of the country. It commenced operations in 1982 under the Export-Import Bank of India Act 1981. Government of India launched the institution with a mandate to not just enhance exports from India, but also to integrate the countrys foreign trade and investment with the overall economic growth.

CHAPTER 1

INTRODUCTION

Export-Import Bank of Indiais the premierexportfinance institution in India, established in 1982 under the Export-Import Bank of India Act 1981. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like otherExport Credit Agenciesin the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in theirglobalisationefforts, through a wide range of products and services offered at all stages of the business cycle, starting from import oftechnologyand exportproduct developmentto export production,export marketing, pre-shipment and post-shipment and overseas investment.

Export-Import Bank of India (Exim Bank) www.eximbankindia.in Export-Import Bank of India (EXIM Bank) is a specialized financial institution, wholly owned by Government of India, set up in 1982, for financing, facilitating and promoting foreign trade of India. EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities overseas, to enable buyers in those countries to import developmental and infrastructure projects, equipment, goods and services from India, on deferred credit terms. EXIM Bank has laid strong emphasis on enhancing project exports, the funding options for which have been enhanced with introduction of the Buyer's Credit-National Export Insurance Account (BC-NEIA) program.

The Bank facilitates two-way technology transfer by financing import of technology into India, and investment abroad by Indian companies for setting up joint ventures, subsidiaries or undertaking overseas acquisitions. To promote hi-tech exports from India, the Bank has a lending programme to finance research and development (R&D) activities of export-oriented companies. During the year ended 31st March, 2013, EXIM Bank sanctioned loans of Rs.40,960 crore, while disbursements amounted to Rs.40,635 crore. Loan Assets stood at Rs.65,563 crore as on March 31, 2013.

EXIM Bank has put in place a Technology and Innovation Enhancement and Infrastructure Development (TIEID) Fund of US$ 500 million exclusively for MSMEs by partnering with Banks/FIs. TIEID seeks to meet long term foreign currency loan requirements of the MSME sector in addition to offering short-term export credit refinance in rupee and foreign currency. The Bank has put in place an Export Marketing Services (EMS) Programme to assist Indian companies in identification of prospective business partners, facilitating placement of final orders and also identification of opportunities for setting up plants or projects or for acquisition of companies overseas. During 2012-13, EXIM Bank became the first ever Indian entity to be included in the Emerging Market Bond Index. The Bank became the first Indian entity to tap the Australian Dollar market and Singapore Dollar market.

CHAPTER 1.1

CHAIRMAN AND MANAGING DIRECTOREXPORT-IMPORT BANK OF INDIA

SHRI YADUVENDRA MATHURChairman and Managing Director, Export-Import Bank of India

Shri. Yaduvendra Mathur has been appointed by the Government of India as Chairman and Managing Director of Export-Import Bank of India (Exim Bank). Prior to this appointment, Shri. Mathur was Chairman and Managing Director, Rajasthan Financial Corporation, since 2011.Shri. Mathur is an Indian Administrative Service Officer of the 1986 batch. A First Class Graduate in Economics and an MBA in Finance, Shri. Mathur has worked with Golden Tobacco and Associated Cement Companies in Mumbai between 1982 1984 before joining the Indian Revenue Services (Income Tax) in 1984 and then the IAS in 1986, topping his batch.

He has had long stints in various positions in the Finance Department including Principal Secretary Finance, Government of Rajasthan. During his postings under the Department of Economic Affairs (2001-2003) at Cote d'Ivoire and Tunisia, Shri. Mathur worked as Assistant to the Executive Director. He has had long stints (representing India, Norway, Denmark, Sweden, Finland and Switzerland) of African Development Bank. He was then actively engaged with the Export-Import Bank of India in enhancing and promoting business opportunities for Indian companies in the African continent through Technical Cooperation Agreements. As Energy Secretary of Rajasthan for over three years, Shri. Mathur contributed in the setting up of three greenfield power plants in the state. He was also Planning Secretary, PHED Secretary and Director General Revenue Intelligence in Government of Rajasthan. He also has experience as Managing Director of a Textile Mill at Bhilwara and as Chairman of Indira Gandhi Canal Board. Shri. Mathur was Collector & District Magistrate of Bhilwara and Bharatpur and has also served for over three years as Senior Deputy Director at the Lal Bahadur Shastri National Academy of Administration, Mussoorie.

CHAPTER 1.2FUNCTIONS OF EXIM BANKExport-Import Bank of India is the premier export finance institution of the country. It commenced operations in 1982 under the Export-Import Bank of India Act 1981. Government of India launched the institution with a mandate to not just enhance exports from India, but also to integrate the countrys foreign trade and investment with the overall economic growth. Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.Exim Bank is managed by a Board of Directors, which has representatives from the Government,Reserve Bank of India,Export Credit Guarantee Corporation of India, afinancial institution,public sectorbanks, and the business community.

The Bank's functions are segmented into several operating groups including:1. Corporate Banking Group which handles a variety of financing programmes forExport Oriented Units(EOUs),Importers, and overseas investment by Indian companies.

2. Project Finance / Trade Finance Group handles the entire range of export credit services such as supplier's credit, pre-shipment Agriculture Business Group, to spearhead the initiative to promote and support Agricultural exports. The Group handles projects and export transactions in theagricultural sectorfor financing.

3. Small and Medium Enterprise: The group handles credit proposals from SMEs under various lending programmes of the Bank.

4. Export Services Group offers variety of advisory and value-added information services aimed at investment promotion.

5. Export Marketing Services Bank offers assistance to Indian companies, to enable them establish theirproductsin overseas markets. The idea behind this service is to promote Indian export. Export Marketing Services covers wide range of export oriented companies and organizations. EMS group also covers Project exports and Export of Services.

The important functions of Exim Bank are as follows:1. Planning, promoting and developing exports and imports; 2. Providing technical, administrative and managerial assistance for promotion, management and expansion of exports; 3. Undertaking market and investment surveys and techno-economic studies related to development of exports of goods and services. 4. It provides direct financial assistance to exporters of plant, machinery and related service in the form of medium-term credit. 5. Underwriting the issue of shares, stocks, bonds, debentures of any company engaged in exports. 6. It provides rediscount of export bills for a period not exceeding 90 days against short-term usance export bills discounted by commercial banks.7. The bank gives overseas buyers credit to foreign importers for import of Indian capital goods and related services. 8. Developing and financing export oriented industries.9. Collecting and compiling the market and credit information about foreign trade.10. Financing of exports and imports of goods and services, not only of India but also of the third world countries;11. Financing of exports and imports of machinery and equipment on lease basis;12. Financing of joint ventures in foreign countries;13. Providing loans to Indian parties to enable them to contribute to the share capital of joint ventures in foreign countries;14. To undertake limited merchant banking functions such as underwriting of stocks, shares, bonds or debentures of Indian companies engaged in export or import; and15. To provide technical, administrative and financial assistance to parties in connection with export and import.

Besides these, the Support Services groups, which include: Research & Planning, Treasury and Accounts, Loan Administration, Internal Audit, Management Information Services, Information Technology, Legal, Human Resources Management and Corporate Communications.

CHAPTER 1.3

OBJECTIVES

for providing financial assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the countrys international trade shall act on business principles with due regard to public interest

MAIN OBJECTSThe Export-Import Bank of India Act, 1981. The Export-Import Bank of India was set up by the Government of India on January 1, 1982. Its main objects are:1. To ensure and integrated and co-ordinated approach in solving the allied problems encountered by exporters in India.2. To pay specific attention to the exports of capital goods;3. Export projection;4. To facilitate and encourage joint ventures and export of technical services and international and merchant banking;5. To extend buyers credit and lines of credit;6. To tap domestic and foreign markets for resources for undertaking development and financial activities in the export sector.

CHAPTER 1.4

MANAGEMENT, FUNCTIONS AND ACTIVITIES OF EXIM BANK

The Export-Import Bank (Exim bank) was set up on January 1, 1982 to take over the operations of international finance wing of the IDBI and to provide financial assistance to exporters and importers and to function as a head financial institution for coordinating the working of other institutions engaged in financing of exports and imports of goods and services.The authorised capital of Exim bank is Rs. 200 crore and paid-up-capital is Rs. 100 crore wholly subscribed by the Central Government.

Organisation and Management:The Exim Bank is managed by a Board consisting of a Managing Director who is the Chairman and 17 Directors representing different areas. They are Secretary to the Department of Industrial Board, Commerce Secretary, Finance Secretary, Secretary to Banking, Secretary IDBI, Secretary ECGC Secretary RBI, 3 directors representing other scheduled commercial banks, 4 Directors chosen from export community and 3 others representing ministries and departments.

The authorised capital of Exim Bank is Rs. 200 crores, of which Rs. 75 crores is paid up. The banks have secured a long-term loan of Rs. 20 crores from the Government of India. It can also borrow from the RBI. It is empowered to raise resources in domestic and international markets.

The Bank began its lending operations from March, 1982. Till June, 1982, it has extended assistance up to Rs. 133 crores to the export sector in various ways.The establishment of Exim Bank may be regarded as a right step in the export promotion policy and programmme of the Government.During 1984, the Exim Bank sanctioned various programmes of funded assistance of Rs. 430 crores. It also launched a new programme to provide term finance for export-oriented units, under which assistance was provided through a consortium for establishing a 100 per cent export unit in the ceramics industry.

The Exim Bank also extended its financial assistance to Indian exports through letters of credit, re-lending facility, export bills rediscounting, overseas investment finance, facilities for deemed exports and assistance to hundred per cent export units and units in free trade zone.

At the end of December 1984, the Exim Banks outstanding underfunded and non-funded assistance amounted to Rs. 415 crores and Rs. 510 crores, respectively.In 1984, the Exim Bank signed a loan agreement to borrow one billion yen from the Japanese commercial yen market.

In June 1986, the Exim Bank introduced a new programme called the Export Marketing Fund (EMF), under which finance is made available to Indian companies for undertaking export marketing activities. The programme also covers activities like desk research, minor product adaptation, overseas operations and travel to India by buyers overseas. During 1986, Rs. 78 lakhs were sanctioned, while Rs. 3.4 lakhs have been utilised under the EMF.

On whole, the Exim Bank concluded an agency credit line of US $ 15 million with the International Finance Corporation (IFC).

During 1994-95, Exim Bank sanctioned Rs. 2,466 crore and disbursed Rs. 2,130 crore of financial assistance under various lending project.

Activities of Exim Bank:

The bank can raise additional resources through borrowing from Government of India, from RBI and from the market through the issue of bonds and debentures. Exam bank also provides refinance facilities to the commercial bank and financial institutions against their export-import financing activities.During the Year ending on 31 March, 2003, Exim Bank sanctioned loans of Rs. 7,828 crores while disbursements amounted to Rs. 5,320 crores, Net Profit (before tax) of the bank for the period 2002-03 on account of General Fund amounted to Rs. 268 crore.

CHAPTER 2

AN ORGANISATIONAL ENVIRONMENT CONDUCIVE TO ACHIEVING EXCELLENCE

Organisational Chart Board Of Directors Culture Financial Highlights ORGANISATIONAL CHART Exim Bank is fully owned by the Government of India and is managed by a Board of Directors with representation from Government, financial institutions, banks, business community. The Bank is professionally run with a total staff of 190 who are drawn from six major streams: commercial and development banking, engineering, economics, accountancy, computer technology and business school graduates ORGANISATIONAL CULTUREBank offers a congenial and challenging work environment. Salient features of the work environment are emphasis on office automation, an open office system, an independent 'doer's' work culture, minimization of hierarchical constraints in organisational functioning, and multi-disciplinary inputs in decision making. Skill upgradation is a continuing process in the Bank. Bank's professionals undergo training in areas of relevance to the Bank in India and abroad. The training programmes are chosen and designed to develop technical and managerial skills in the professionals and an ability to initiate and innovate.

Size and Nature In comparison with other organisations with similar asset levels, Exim Bank's staff strength is lean. As of March, 2005, total personnel in the Bank numbered 193. Highly automated office systems ensure that personnel are equipped with timely and complete information and streamlined work processes. The human resources of the Bank include 139 professionals who are drawn from a variety of backgrounds embodying various disciplines which are required for the Bank's functions. They include bankers, business school graduates, chartered accountants, economists, engineers and computer specialists. Nature of work Right from its inception, Exim Bank has attached a great deal of importance to a congenial and challenging work environment. The objective has been to achieve excellence in its area of operations, not only in comparison with national organisations but also in a global context. The bank has a private sector work ethic, while drawing upon the advantages thrown up by way of its public sector ownership. An important reason for this has been the relatively young age of the organisation which enabled the Bank to cast itself in a different mould right from inception without being saddled with a legacy of outmoded work practices. Some salient features of the work environment are the emphasis on office automation, an open office system, an independent "doer's" work culture, minimisation of hierarchical constraints in organisational functioning, and multi-disciplinary inputs in decision making. Exim Bank is an officer oriented organisation. Officers work independently and self-sufficiently in all the activities that their job entails. A sense of togetherness and common purpose is sought to be fostered by the Bank's in-house publication Eximius, and the annual staff get-together. The Eminent Persons Lecture Series brings persons who have achieved eminence in diverse fields to interact and share their experience with officers. Degree Of Emphasis Exim Bank operates at the frontier of available office automation and technology. The Bank believes that human resources should primarily be utilized for activities that require knowledge, skills, analysis and discretionary choices. An array of state-of-the-art computer hardware, software, and telecommunications are available to the Bank's personnel. Members of the staff make use of these facilities to the fullest extent feasible not only for non-discretionary activities but also as necessary tools for optimizing their work output both in terms of quantity and quality. The lean staff strength makes it possible for the Bank to provide each officer with his/her own personal computer as well as unlimited access to office automation and technology. Multi-disciplinary inputs The complexity of the Bank's functions requires cross-disciplinary inputs for effective and correct decision-making. Thus, all important decisions are taken with the aid of inputs from relevant specialists within the Bank. This enables a comprehensive micro and macro level assessment of risks and rewards. Through this process of collegiate decision making, team work and inter personal skills are deployed to the fullest extent so as to make optimum use of the Bank's diverse human resources. Objective of the Young Professionals ProgrammeThe Young Professionals Programme is the entry-point for a career with Exim Bank. The Bank requires skills relating to various disciplines e.g. business management, banking, economics, accountancy and engineering. Prior work experience is neither expected, nor considered necessary. Right from the very first year, young professionals will be working independently on challenging assignments. The Young Professionals Programme offers an exciting and challenging career to those with the capability and desire to operate at the cutting edge of India's globalisation process.Long-term career prospects Except for those positions where highly specialised skills are needed, the Bank does not normally recruit directly to higher professional positions. Thus, young professionals who are committed to a long-term career in the bank, can expect to rise to the upper echelons of the Bank's management in due course of time. Career growth is determined by performance and merit, based on an objective and structured system of evaluation. The Bank anticipates a major expansion and diversification of its activities in the medium and long run, largely because of the opportunities arising from India's ongoing globalisation efforts. Therefore, young professionals can look forward to a fruitful career with the Bank. Training Programme Given the complexity of the Bank's operations, as reflected by the many specialised groups and work-skills, young professionals need to spend time gaining exposure and knowledge of the various activities and skills utilised in the Bank. This is especially necessary because efficient decision making in the Bank requires knowledge of a variety of skills and practices. Working with various groups, young professionals become fully conversant with all the critical functions and activities. They are also actively involved in appropriate assignments entailing individual responsibility. The Bank is unique in its global and national network of institutional and professional linkages. The five overseas offices - at Washington D.C., Singapore, Budapest, London and Johannesburg - have helped forge strategic institutional linkages for the Bank with multilateral agencies such as Multilateral Investment Guarantee Agency, World Bank, Asian Development Bank, African Development Bank, Export Credit Agencies, Trade and Investment Promotion Agencies abroad. The Bank's extensive global network, supported by the Indian Missions abroad facilitates interaction with such agencies and opens up new opportunities for knowledge building and upgradation of skills.Learning opportunities are created for officers by way of participation in seminars and exhibitions (in India and abroad) sponsored by the Bank, with a view to preparing them to perform roles / jobs which they may be required to take up in the future as they go up in the organisational hierarchy, or if the Bank is venturing into new areas through joint ventures or expansion. State-of-the-art training in highly specialised areas is furthered by the new initiatives of the Bank, establishing links with multilateral agencies such as MIGA, IFC Washington and the World Bank. Special programmes organised in coordination with these agencies are customised to meet the specific requirements of the Bank.SalaryDuring the training period, young professionals are paid a monthly stipend of Rs. 15,000/-. Thereafter, upon absorption as Manager, salaries would correspond to the scale for this cadre. Currently, gross emoluments at the minimum of the scale amount to about Rs. 17,900/-. "Dearness Allowance," which constitutes a component of salaries, changes at quarterly intervals to reflect movements in the price index. Therefore, actual salaries in the scales alter periodically. PerquisitesApart from the salary, the Bank provides attractive perquisites, the monetary equivalent of which is considerable, in relation to the salary. A major perquisite which the Bank endeavours to provide to young professionals is furnished bachelor accommodation, based on need and subject to availability. Individual rooms in the Bank's furnished flats with common kitchen and lounge are allotted to young professionals wherever possible. Until now, all young professionals joining the Bank have been provided with accommodation. As regards family accommodation, the Bank can consider the same subject to availability. Another valuable perquisite is the scheme for reimbursement of fees for the purpose of acquisition of skills considered useful to the Bank - for instance, computer skills, foreign languages. THE LEADERSHIPSince its inception, Exim Bank has had, at the helm of its affairs, leading banking professionals as Chief Executive Officers. Shri R.C. Shah, a seasoned banker, with vast commercial and international banking experience, was the 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. He was succeeded by Shri Kalyan Banerji, who was the Chairman and Managing Director during February 1985-April 1993. Shri Banerji had long years of commercial banking experience, with exposure to international banking. Ms. Tarjani Vakil took over as the Chairperson and Managing Director of the Bank in August 1993 and guided the institution in its endeavors for export capability creation, till October 1996. She was succeeded by Shri Y.B. Desai, who was the Managing Director of the Bank during August 1997-April 2001. Shri T.C. Venkat Subramanian then took over as Chairman and Managing Director of Exim Bank in May 2001 and retired in October 2009. Smt. Ravneet Kaur, then Joint Secretary (IF) Department of Financial Services, Ministry of Finance headed the institution from November 2009 to March 2010. She was succeeded by Shri T.C.A. Ranganathan in April 2010 who headed the institution for over 3 years and retired in November 2013. After the retirement of Shri Ranganathan, Shri Anurag Jain, Joint Secretary, Department of Financial Services, Ministry of Finance held the interim charge of CMD till mid-February. Shri Yaduvendra Mathur, IAS, has joined Exim Bank as its present Chairman and Managing Director on February 20, 2014. Prior to his joining Exim Bank, Shri Mathur was the Chairman and Managing Director, Rajasthan Financial Corporation. He is an Indian Administrative Service Officer of the 1986 batch and has had long stints in various positions in the Finance Department including Principal Secretary Finance, Government of Rajasthan. During his postings under the Department of Economic Affairs (2001-2003) at Cote d'Ivoire and Tunisia, Shri Mathur had worked as Assistant to the Executive Director (representing India, Norway, Denmark, Sweden, Finland and Switzerland) of African Development Bank. He was then actively engaged with the Export-Import Bank of India in enhancing and promoting business opportunities for Indian companies in the African continent through Technical Cooperation Agreements.

CHAPTER 3

FINANCE BY EXIM BANK EXIM INDIA offers a range of financing programmes that match the menu of Exim Banks of the industrialised countries. However, the Bank is atypical in the universe of Exim Banks in that it has over the years evolved, so as to anticipate and meet the special needs of a developing country. EXIM INDIA operates a wide range of financing and promotional programmes. The Bank finances exports of Indian machinery, manufactured goods, consultancy and technology services on deferred payment terms. EXIM INDIA also seeks to co finance projects with global and regional development agencies to assist Indian exporters in their efforts to participate in such overseas projects.The Bank is involved in promotion of two-way technology transfer through the outward flow of investment in Indian joint ventures overseas and foreign direct investment flow into India. EXIM INDIA is also a Partner Institution with European Union and operates for facilitating promotion of joint ventures in India through technical and financial collaboration with medium sized firms of the European Union.

FINANCE:Guidelines on Project & Services Exports Issued by RBI under Sec. 47 of Foreign Exchange Management Act, 1999 Types of Exports covered : Export of Goods on Deferred Payment Terms (e.g. Export of machinery, equipment, manufactured products) Turnkey Projects (e.g. Setting up of Sugar Plant, Cement Plant) Construction Projects (e.g. Construction of Roads, Dams, Bridges) Consultancy & Technical Services (e.g. Operation & Maintenance Contracts) Collectively referred to as 'PROJECT & SERVICES EXPORTS'

Definition of Deferred Payment Exports In terms of Regulation 9 of the Foreign Exchange Management Act 1999, the amount representing the full export value of goods exported must be realised and repadriated to India within 6 months of date of export. Exports where more than 10% of the value is realised beyond the prescribed period, i.e., 6 months from date of shipment, are treated as Deferred Payment Exports FUNDED: Lines Of Credit:General Guidelines on Exim Lines of credit:Introduction:Exim Bank extends lines of credit to overseas governments/agencies nominated by them or financial institutions overseas to enable buyers in those countries to import capital/engineering goods, industrial manufactures and related services from India on deferred payment terms. This facility enables importers in those countries to import from India on deferred credit terms as per the terms and conditions already negotiated between Exim Bank and the overseas agency. The Indian exporters can obtain payment of eligible value from Exim Bank against negotiation of shipping documents, without recourse to them. FeaturesThe lines of credit are denominated in convertible foreign currencies or Indian Rupees and extended to sovereign governments/agencies nominated by them or financial institutions. Such governments/agencies/institutions are the borrowers and Exim Bank the lender. Terms and conditions of different lines of credit are varying and details in respect of each line of credit can be obtained from Exim Bank. It would need to be ascertained from time to time that the lines of credit have come into effect and uncommitted balance is still available for utilization. Indian exporters also need to ascertain the quantum of service fees payable to Exim Bank on account of pro rata export credit insurance premium and / or interest rate differential cost that they can then paid up in their prices to their importers

How it works The buyer arranges to obtain allocation of funds under the credit line from the borrower. The exporter then enters into contract with the buyer, for the eligible items covered under the line of credit. The contracts would need to conform to the basic terms and conditions of the respective credit lines. (Particulars of effective lines of credit are available separately) The delivery period stipulated in the contracts should be such that credit can be drawn from Exim Bank within the terminal disbursement date stipulated under the respective line of credit agreements. Also, all contracts should provide for pre-shipment inspection by the buyer or agent nominated by buyer. The buyer arranges to comply with procedural formalities as applicable in his country and then submits the contract to the borrower for approval. The borrower in turn forwards copies of the contract to Exim Bank for approval. Exim Bank advises approval of the contract to the borrower, with copy to exporter, indicating approval number, eligible contract value, last date for disbursement, and other conditions subject to which approval is granted. The Buyer, on advice from the borrower, establishes an irrevocable sight letter of credit(L/C). A single L/C is to be opened, covering the full eligible value of the contract including, freight and/or insurance as laid down in the contract. The letter of credit is advised through a bank in India designated by Exim Bank. Exporter ships the goods covered under the contract and presents documents for negotiation to the designated bank. The Bank forwards negotiated documents to the buyer. On receipt of clean non-negotiable set of shipment documents along with the relative invoices, inspection certificate and a certificate that documents negotiated are as per terms of L/C and without reserve from the negotiating bank and after having satisfied itself, that all formalities have been complied with in conformity with the terms of the Credit Agreement, Exim Bank reimburses the eligible value of shipment in equivalent rupees at spot exchange rate to the negotiating bank for payment to the exporter. Exim Bank debits the borrower's account and arranges to collect interest and principal receivable on due dates as per the terms of the line of credit agreement between Exim Bank and the borrower. It may be noted: Any bank charges, commission expenses payable in India as also pro-rata export credit insurance premium and / or interest rate differential cost, as may be applicable shall be to the account of the exporter. The exporter is advised to ascertain from EXIM Bank the amount service fee payable by the exporter, before entering into commercial contract with the overseas buyer. Exim Bank will not be liable to pay interest for the period between dates of negotiation and actual reimbursement from EXIM Bank. A Variety of LINE OF CREDIT Programmes1. Particulars of the Line of Credit to Seychelles Marketing Board(SMB), Seychelles2. Particulars of the Line of Credit to Vneshtorgbank (Bank For Foreign Trade), Russian Federation3. Particulars of the Line of Credit to Banco Bradesco S.A., Brazil 4. Particulars of the Line of Credit to Banco Industrial De Venezuela, C.A.5. Particulars of the Line of Credit to Banco de Comercio Exterior de Colombia S.A. 6. Confirmation Of Letters Of Credit(L/C) By Exim Bank Under The Trade Facilitation Programme Of The European Bank For Reconstruction And Development (EBRD) 7. Technology Upgradation Fund Scheme for Textile and Jute Industries SUPPLIER'S CREDIT: Supplier's Credit for deferred payment exportsWhat is on offer?Exim Bank offers Supplier's Credit in Rupees or in Foreign Currency at post-shipment stage to finance export of eligible goods and services on deferred payment terms. Supplier's Credit is available both for supply contracts as well as project exports; the latter includes construction, turnkey or consultancy contracts undertaken overseas.

Who can seek finance?Exporters can seek Supplier's Credit in Rupees/ Foreign Currency from Exim Bank in respect of export contracts on deferred payment terms irrespective of value of export contracts.

What are the general terms of Supplier's Credit?a. Extent of Supplier's Credit100% of post-shipment credit extended by exporter to overseas buyer. b. Currency of CreditSupplier's Credit from Exim Bank is available in Indian Rupees or in Foreign Currency. c. Rate of InterestThe rate of interest for Supplier's Credit in Rupees is a fixed rate and is available on request. Supplier's Credit in Foreign Currency is offered by Exim Bank on a floating rate basis at a margin over LIBOR dependent upon cost of funds.d. SecurityAdequate security by way of acceptable letter of credit and/or guarantee from a bank in the country of import or any third country is necessary, as per RBI guidelines. e. Period of Credit and RepaymentPeriod of credit is determined for each proposal having regard to the value of contract, nature of goods covered, security, competition. Repayment period for Supplier's Credit facility is fixed coinciding with the repayment of post-shipment credit extended by Indian exporter to overseas buyer. However, the Indian exporter will repay the credit to Exim Bank as per agreed repayment schedule, irrespective of whether or not the overseas buyer has paid the Indian exporter.

Utilization of CreditExim Bank enters into Supplier's Credit Agreement with Indian exporter as also with exporter's commercial bank in the event of the latter's participation in the Supplier's Credit. The Agreement covers details of draw-down, repayment, and includes an affirmation by Indian exporter that repayment to Exim Bank would be made on due date, regardless of whether due payments have or have not been received from overseas buyer. i. Negotiation of DocumentsCommercial bank negotiates export documents and seeks reimbursement of Supplier's Credit amount. ii. Supplier's Credit ClaimsCommercial bank seeks reimbursement of Supplier's Credit from Exam Bank along with a. Annexure containing particulars of shipment/s made (drawal form and Annexure format are provided to banks at the time of issue of sanction). b. Copies of shipping documents. On satisfying itself that the disbursement claim is in order, Exim Bank either credits the amount in Rupees under Rupee Supplier's Credit into the account of the commercial bank, maintained with Reserve Bank of India (RBI) at Mumbai, or the commercial bank's Nostro Account under Foreign currency Supplier's Credit and advises details of the amount credited to bank/exporter. iii. Repayment of Supplier's CreditThe exporter repays principal amount of credit to Exim Bank as per agreed repayment schedule. Interest amounts are payable to Exim Bank half-yearly without any moratorium.Supplier's Credit [Regulatory Norms] - Supply/Turnkey/ConstructionRBI has laid down guidelines for project exports and export of goods from India on deferred payment terms. RBI's guidelines relating to Project Export contracts are contained in Memorandum PEM published by RBI. It is a priced publication and available at any of the Regional Offices of RBI throughout IndiaOverseas Buyer's Credit: This is offered directly to foreign importers for the import of Indian capital goods and relative services with repayment terms spread over a period of years. Loan under FREPEC Programme: Financing Rupee Expenditure for Project Export Contracts

About FREPEC - Finance Rupee Expenditure for Project Export Contracts

This programme seeks to Finance Rupee Expenditure for Project Export Contracts, incurred by Indian companies.

Purpose To enable Indian project exporters to meet Rupee expenditure incurred/required to be incurred for execution of overseas project export contracts such as for mobilisation/purchase/acquisition of materials and equipment, mobilisation of personnel, payments to be made in India to staff, sub-contractors, consultants and to meet project related overheads in Indian Rupees. Pre-Shipment Rupee Credit Pre-shipment Rupee Credit is extended to finance temporary funding requirement of export contracts. This facility enables provision of rupee mobilisation expenses for construction/ turnkey projects. Exporters could also avail of pre-shipment credit in foreign currencies to finance cost of imported inputs for manufacture of export products to be supplied under the projects. Commercial banks also extend this facility for definite periods. Pre-Shipment FinanceAn application for pre-shipment advance should be made by you to your banker along with the following documents: Confirmed export order/contract or L/C etc. in original. Where it is not available, an undertaking to the effect that the same will be produced to the bank within a reasonable time for verification and endorsement should be given. An undertaking that the advance will be utilised for the specific purpose of procuring/manufacturing/shipping etc., of the goods meant for export only, as stated in the relative confirmed export order or the L/C. If you are a sub-supplier and want to supply the goods to the Export/Trading/Star Trading House or Merchant Exporter, an undertaking from the Merchant Exporter or Export/Trading/Star Trading House stating that they have not/will 7 3 not avail themselves of packing credit facility against the same transaction for the same purpose till the original packing credit is liquidated. Copies of Income Tax/Wealth Tax assessment Order for the last 2-3 years in the case of sole proprietary and partnership firm. Copy of Exporter's Code Number (CNX). Copy of a valid RCMC (Registration-cum-Membership Certificate) held by you and/or the Export/Trading/Star Trading House Certificate. Appropriate policy/guarantee of the ECGC. Any other document required by the Bank. For encouraging exports, R.B.I. has instructed the banks to grant preshipment advance at a concessional rate of interest. The present rate of interest is 10% p.a. for pre-shipment advance upto an initial period of 180 days. Pre-shipment advance for a further period of 90 days is given at the concessional rate of 13% p.a. Banks are free to determine the interest rate for advances beyond 270 days and upto 360 days.

Following special schemes are also available in respect of pre-shipment finance: Exim Bank's scheme for grant of foreign currency pre-shipment credit to exporters for financing cost of imported inputs for manufacture of export products. Scheme of export packing credit to sub-suppliers from export order. Packing credit for deemed exports. Pre-shipment Credit in Foreign Currency (PCFC). For further details refer to Nabhi's "How to Borrow from Financial and Banking Institutions".

Post Shipment FinancePost-shipment finance is the finance provided against shipping documents. It is also provided against duty drawback claims. It is provided in the following forms:

Purchase of Export Documents drawn under Export Order: Purchase or discount facilities in respect of export bills drawn under confirmed export order are generally granted to the customers who are enjoying Bill Purchase/Discounting limits from the Bank. As in case of purchase or discounting of export documents drawn under export order, the security offered under L/C by way of substitution of credit-worthiness of the buyer by the issuing bank is not available, the bank financing is totally dependent upon the credit worthiness of the buyer, i.e. the importer, as well as that of the exporter or the beneficiary. The documents dawn on DP basis are parted with through foreign correspondent only when payment is received while in case of DA bills documents (including that of title to the goods) are passed on to the overseas importer against the acceptance of the draft to make payment on maturity. DA bills are thus unsecured. The bank financing against export bills is open to the risk of non-payment. Banks, in order to enhance security, generally opt for ECGC policies and guarantees which are issued in favor of the exporter/banks to protect their interest on percentage basis in case of non-payment or delayed payment which is not on account of mischief, mistake or negligence on the part of exporter. Within the total limit of policy issued to the customer, drawee-wise limits are generally fixed for individual customers. At the time of purchasing the bill bank has to ascertain that this drawee limit is not exceeded so as to make the bank ineligible for claim in case of non-payment.

Advances against Export Bills Sent on Collection: It may sometimes be possible to avail advance against export bills sent on collection. In such cases the export bills are sent by the bank on collection basis as against their purchase/discounting by the bank. Advance against such bills is granted by way of a 'separate loan' usually termed as 'post-shipment loan'.

This facility is, in fact, another form of post- shipment advance and is sanctioned by the bank on the same terms and conditions as applicable to the facility of Negotiation/Purchase/Discount of export bills. A margin of 10 to 25% is, however, stipulated in such cases. The rates of interest etc., chargeable on this facility are also governed by the same rules. This type of facility is, however, not very popular and most of the advances against export bills are made by the bank by way of negotiation/purchase/discount.

Advance against Goods Sent on Consignment Basis: When the goods are exported on consignment basis at the risk of the exporter for sale and eventual remittance of sale proceeds to him by the agent/consignee, bank may finance against such transaction subject to the customer enjoying specific limit to that effect. However, the bank should ensure while forwarding shipping documents to its overseas branch/correspondent to instruct the latter to deliver the document only against Trust Receipt/Undertaking to deliver the sale proceeds by specified date, which should be within the prescribed date even if according to the practice in certain trades a bill for part of the estimated value is drawn in advance against the exports.

Advance against Undrawn Balance: In certain lines of export it is the trade practice that bills are not to be drawn for the full invoice value of the goods but to leave small part undrawn for payment after adjustment due to difference in rates, weight, quality etc. to be ascertained after approval and inspection of the goods. Banks do finance against the undrawn balance if undrawn balance is in conformity with the normal level of balance left undrawn in the particular line of export subject to a maximum of 10% of the value of export and an undertaking is obtained from the exporter that he will, within 6 months from due date of payment or the date of shipment of the goods, whichever is earlier surrender balance proceeds of the shipment. Against the specific prior approval from Reserve Bank of India the percentage of undrawn balance can be enhanced by the exporter and the finance can be made available accordingly at higher rate. Since the actual amount to be realised out of the undrawn balance, may be less than the undrawn balance, it is necessary to keep a margin on such advance.

Advance against Retention Money: Banks also grant advances against retention money, which is payable within one year from the date of shipment, at a concessional rate of interest up to 90 days. If such advances extend beyond one year, they are treated as deferred payment advances which are also eligible for concessional rate of interest.

Advances against Claims of Duty Drawback: Duty Drawback is permitted against exports of different categories of goods under the 'Customs and Central Excise Duty Drawback Rules, 1995'. Drawback in relation to goods manufactured in India and exported means a rebate of duties chargeable on any imported materials or excisable materials used in manufacture of such goods in India or rebate on excise duty chargeable under Central Excises Act, 1944 on certain specified goods. The Duty Drawback Scheme is administered by Directorate of Duty Drawback in the Ministry of Finance. The claims of duty drawback are settled by Custom House at the rates determined and notified by the Directorate. As per the present procedure, no separate claim of duty drawback is to be filed by the exporter. A copy of the shipping bill presented by the exporter at the time of making shipment of goods serves the purpose of claim of duty drawback as well. This claim is provisionally accepted by the customs at the time of shipment and the shipping bill is duly verified. The claim is settled by customs office later. As a further incentive to exporters, Customs Houses at Delhi, Mumbai, Calcutta, Chennai, Chandigarh, Hyderabad have evolved a simplified procedure under which claims of duty drawback are settled immediately after shipment and no funds of exporter are blocked. However, where settlement is not possible under the simplified procedure exporters may obtain advances against claims of duty drawback as provisionally certified by customs.

Negotiation of Export documents Drawn under L/C: This aspect has been discussed in the chapter on Special Care for negotiation of Export Documents under Letter of Credit. Refinance of Export Loans Authorised Dealers in foreign exchange can obtain from Exim Bank, hundred percent refinance of deferred payment loans extended for export of eligible Indian goods. Forfeiting Forfeiting is a mechanism of financing exports. by discounting export receivables evidenced by bills of exchange or promissory notes without recourse to the seller (viz. exporter) carrying medium to long term maturities on a fixed rate basis (discount) upto 100 percent of the contract value. The word `forfeit' is derived from the French word `a forfait' which means the surrender of rights. Simply put, forfeiting is the non-recourse discounting of export receivables. In a forfeiting transaction, the exporter surrenders, without recourse to him, his rights to claim for payment on goods delivered to an importer, in return for immediate cash payment from a forfaiter. As a result, an exporter in India can convert a credit sale into a cash sale, with no recourse to the exporter or his banker.

Non-Funded Exim Bank issues following guarantees directly or in participation with other banks, for project export contract. Bid Bond Bid Bond is generally issued for a period of six months.

Advance Payment Guarantee Exporters are expected to secure a mobilisation advance of 10-20% of the contract value which is normally released against bank guarantee and is generally recovered on a pro-rata basis from the progress payments during project execution. Performance Guarantee Performance guarantee for 5-10% of contract is issued, valid upto completion of maintenance period normally one year after completion of contract period and/or grant of Final Acceptance Certificate (FAC) by the overseas employer. Format of guarantee is expected to be furnished by exporter, at least four weeks before actual issue, to facilitate discussions and formal approval.

Guarantee for Release of Retention Money:This enables the exporter to obtain the release of retention money (normally 10% of contract value) before obtaining Final Acceptance Certificate (FAC) from client.

Guarantee for Raising Borrowings Overseas Bridge finance may be needed at the earlier phases of the contracts to supplement the mobilisation advance. Bridge finance upto 25% of the contract value may be raised in foreign currency from an overseas bank against this guarantee issued by a bank in India. Request for overseas borrowings must be supported by currency-wise cash flows, also indicating the outstanding letters of credit and L/C drawal schedule

Other Guarantees e.g. in lieu of customs duty or security deposit for expatriate labour. Guarantee commission is charged at rates stipulated by the Foreign Exchange Dealers Association of India (FEDAI) or as stepulated by guarantee issuing bank. Margin requirement for issue of guarantee is generally waived by banks for Export Performance Guarantee. However, appropriate securities are availed of. Export Capability Creation Programmes Lending Programme for Export Oriented Units Production Equipment Finance Programme Technology Upgradation Fund Scheme for Textile and Jute Industries Overseas Investment Finance Programme Equity Investment in Indian Ventures Abroad Asian Countries Investment Partners Programme Export Marketing Finance Programme Export Product Development Programme Export Vendor Development Programme Programme for Export Facilitation Port Development Software Training Institutes Foreign Currency Pre-shipment Credit Working Capital Term Loan Programme for Export Oriented Units Bulk Import Finance Finance for Research & Development for Export Oriented Units Long Term Working Capital Import Finance

CHAPTER 4

SERVICES RENDERED BY EXIM BANK

EXPORT SERVICESADVISORY SERVICES MULTILATERAL AGENCIES FUNDED PROJECTS OVERSEAS (MFPO) Services Information and support services to Indian companies to help improve their prospects for securing business in multilateral agencies funded projects. Dissemination of business opportunities in funded projects Providing detailed information on projects of interest Information on Procurement Guidelines, Policies, Practices of Multilateral Agencies Assistance for Registration with Multilateral Agencies Advising Indian companies on preparation of Expression of Interest, Capability Profile Bid Intervention PROMOTING INDIAN CONSULTANCY Tie-up with International Finance Corporation, Washington D.C. Africa Project Development Facility Africa Enterprise Fund Technical Assistance & Trust Funds Mekong Project Development Facility Eastern & Southern African Trade & Development Bank (PTA Bank) African Management Services Company (AMSCO), Netherlands

EXIM BANK AS A CONSULTANT Feasibility study for establishment of an export credit and guarantee facility for Gulf Cooperation Council countries. Regional cooperation in export finance and export credit guarantees for ESCAP. Study on promotion of international competitiveness and exports of manufactured goods for ESCAP. Setting up the Afrexim Bank Designing of Export Financing Programmes - Turkey Setting up an Exim Bank in Malaysia Design of Export Marketing Seminars for SMEs in Vietnam Export Development Project : Ukraine Enterprise Support Fund : Armenia Establishing an Export Credit Guarantee Company in Zimbabwe Advisory services to Industrial Development Corporation of South Africa for international finance products

PROMOTIONAL PROGRAMMES Project Preparatory Services Overseas Programme Set up in 1987 to promote Indian consultancy at preparatory stages in projects overseas with potential of Multilateral Funding and downstream linkages for Indian exports. Eligible Costs Project feasibility studies, project formulation and related advisory services Examples Railway Sector Study - Vietnam * Thermal Power - Macedonia Road Rehabilitation - Uzbekistan * Agriculture - Egypt

CHAPTER 5EXIM BANK'S ROLE IN PROMOTING INTERNATIONAL TRADE

Export-Import Bank of India (Exim Bonk, In short) is a wholly cerement-owned financial institution, set up for the purpose of financing, facilitating and promoting Indian's 'foreign trade. Exim Bank plays a four-pronged role with 'regard to India's foreign trade: those of a coordinator, a source of finance, consultant and promoter.

Exim Bank offers a diverse range of financing services for the Indian exporter, including a variety of Export Credit Facilities and Finance for Export Oriented Companies. Exim Bank's mission is to facilitate globalisation of Indian business.

The Bank, set up in 1982, is the principal financial institution in the country for co-ordinating working of institutions engaged in financing exports and imports.

The Bank offers a range of financing programmes that match the menu of Exim Banks of the industrialized countries. However, the Bank is atypical in the universe of Exim Banks in that it has over the years evolved, so as to anticipate and meet the special needs of a developing country. The Bank provides competitive finance at various stages of the export cycle.

The Bank finances exports of Indian machinery, manufactured goods, consultancy and technology services on deferred payment terms. It also seeks to co-finance projects with global and regional development agencies to assist Indian exporters in their efforts to participate in such overseas projects.

The Bank is involved in promotion of two-way technology transfer through the outward flow of investment in Indian joint ventures overseas and foreign direct investment flow into India. It is also a Partner Institution with European Union and operates for facilitating promotion of joint ventures in India through technical and financial collaboration with medium sized firms of the European Union.

Mr. Prabhakar R Dalalspoke on Exim Bank's role in promoting International Trade. Mr. Dalai, General Manager & Group Head, Lines of Credit Group, Exim Bank of India, is M.Com, LL.B, C.A.I.1.8., PGDFERM. He is Fellow of the Indian Institute of Bonking & Finance (FIIBF); Director, West African Development Bank (BOAD), Togo.AIt., Director, Zambia Development Bank, Lusaka, Zambia; and Member of Committees of International Chamber of Commerce & Bombay Chamber of Commerce & Industry. He has travelled extensively abroad as part of Government delegations/Exim Bank delegations, addressed seminars and conferences in India and abroad, met with ministers, senior officials from banking, trade and industry sectors overseas and signed agreements with them, and worked as Exim Bank's Resident Representative in Africa for 4 years.

Deferred payment terms, It also seeks to co-finance projects with global and regional development agencies to assist Indian exporters in their efforts to participate in such overseas projects.

The Bank is involved in promotion of two-way technology transfer through the outward flow of investment in Indian joint ventures overseas and foreign direct investment flow into India. It is also a Partner Institution with European Union and operates for facilitating promotion of joint ventures in India through technical and financial collaboration with medium sized firms of the European Union.

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CHAPTER 6

CONCLUSION

Many economists argued that EXIM Bank sector represented the new beginning of the international capitalism. They traced the evolution of the EXIM Bank sector to the development of transnational corporations. In this context the evolution of the international banking came as a response to the modern phenomenon of capital which obviously goes beyond national borders. At the same time the rapid growth and boom of the technology sector gave a great incentive and facilitated the creation of the international EXIM Bank area. This permitted global access of world market information and subsequently its management and control.

Under the traditional national and international sectors there were several constraints which gave the possibility for offshore activity to grow. These are: the extension of national tax bases; intermittent fiscal and monetary instabilities; the existence of foreign exchange controls and fluctuations; limiting cross-border controls; conservative banking laws and regulations with regard to foreign and domestic industrial entry, systems of supervision and liquidity requirements, constraints on the issue of foreign and domestic bonds, the admission of securities to capital markets, stock exchange, insurance regulations ; company laws which restricted business.

Also it has to be mentioned from the international perspective there was a lack of coherent set of international fiscal principles and laws in which transnational company could operate across border.

The evolution of the EXIM Bank center is described from the perspective of its tax and banking functions. More recently, however, other constraints onshore have served as an incentive element which pushed for offshore investment and have emphasized the importance of that investment. These include: the need to provide for what is seen as the vulnerability of professionals and investors to creditors; the desire to avoid onshore laws and regulations which mandate the reservation of assets to spouses and heirs; the need for savings and investment vehicle for ordinary persons.

EXIM Bank center came with innovative solutions to all these constraints that were mentioned above. Let us refer for example to taxation. There are 3 models of EXIM Bank centers from the perspective of taxation: with zero-tax (here even residents do not pay taxes); with low-tax; tax at normal rates but exemption or other preferential treatment is granted to non-resident investors or investment for certain categories of income.

Notwithstanding the fact that the above categories refers only to tax aspects of EXIM Bank activity, it clearly shows the scope of such centers.Developing countries like India concentrates more on increasing the value and volume of the export turnover to attain economic developments to provide employment opportunities to utilize all the available resources and to finance for exports. But the export sector involves high amount of risk. The Indian exporters have to be protected from several types of risks involved in export business. Here EXIM bank plays vital role. By improving the performance of export, bank is in better position to extend its services to all types of exporters effectively.

EXIM banking of course, extends beyond international banking which in its narrow sense relates to delivery of trade products and services to business and trade Customers. Thus, The EXIM bank of India is regarded as the drivers behind global trade and corporate globalization

BIBLIOGRAPHY

http://en.wikipedia.org/wiki/Exim_Bank_(India)http://www.eximbankindia.in/board-of-directorshttp://siteresources.worldbank.org/CSO/Resources/AM_2006Agrawal.PPThttp://www.ipmma.org/articles4.htmlhttp://www.yourarticlelibrary.com/banking/export-import-bank-of-india-objectives-and-functions/24815/http://www.yourarticlelibrary.com/banking/export-import-bank-of-india-management-functions-and-activities-of-exim-bank/23505/

EXIM BANK OF INDIAPage 36