To ensure higher export credit exposure, the Cabinet on Wednesday cleared amendments to the existing law for increasing the authorised capital of the Export Import Bank of India (Exim Bank) besides strengthening the management structure of the financial institution.
The amendment to the existing Export-Import Bank Act, 1981, seeks to increase the authorised capital of the Exim Bank from R2,000 crore to R10,000 crore with the provision that the government may further increase the said capital up to an amount that it may deem necessary.
The proposed provisions also envisage appointment of two wholetime directors, other than the chairman and managing director (CMD), in the bank by the Centre.
??Increase in the authorised capital would enable the bank to take higher export credit exposures and enable it to borrow funds to disburse under export line of credits,?? an official statement said after the Cabinet meeting.
Exim Bank was set up as a corporation in 1982 for providing financial assistance to exporters and importers. It also functions as the principal financial institution for coordinating the working of different institutions in export financing and import of goods and services.
During 2010-11, 22 letters of credit (LoC) aggregating $2.38 billion were given by the Exim Bank to support export of projects, goods and services from India. In March 2011, the bank had a credit commitment of $6.66 billion covering 72 countries in Africa, Asia, CIS, Europe and Latin America.