Equity financing by Exim Bank is capped at $5 million per overseas venture under the bank's overseas investment finance programme. "There are 6 other ventures in which the bank plans to pick up equity shortly," said Desai.

Desai informed that Exim Bank is keen to take up equity in Indian ventures setting projects in China. The bank has signed a memorandum of understanding (MoU) with the Export-Import Bank of China, which would aid Indian corporates in utilising Exim Bank's relationships with Chinese funding institutions and promotional agencies along with international multi-lateral funding bodies like the World Bank and International Finance Corporation (Washington).

"Exim Bank will open a reciprocal line of credit with its counterpart in China. The MoU is a step in this direction and would lead to concrete measures," Desai said.

The Exim Bank chief expected a growth of 10-15 per cent in approval of funds to export-related projects during the current financial year. The bank had sanctioned Rs 1,838 crore and disbursed Rs 1,271 crore during 1998-99.Desai said that the trade financing business was turning highly competitive as the institution has to face large commercial banks and financial institutions (FIs), who have made a foray into this line of financing in a big way.

"Our disadvantage is that banks have access to deposits and financial institutions to savings through public bond issues. We cannot raise funds through any of these means," he said adding that a number of Indian companies are availing of cheap Libor-linked funds.