The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to infuse Rs 6,000 crore into state-run Exim Bank in two years through FY20 to shore up the export credit agency\u2019s capital base and raise its lending ability. The infusion will be in two tranches \u2014 Rs 4,500 crore in 2018-19 (over and above the budgeted Rs 500 crore for FY19) and Rs 1,500 crore in FY20 \u2014 and will be in the form of recapitalisation bonds. Since the Reserve Bank of India (RBI) allows Exim Bank to lend up to 10 times of its net-owned funds (essentially Tier-I capital, or core-equity capital) within a year, the latest move will enable the export credit agency to lend up to an additional Rs 45,000 crore more in the current fiscal alone, sources told FE. This will ease the flow of credit to the export sector, at a time when growth in outbound shipments has slowed and bank lending to exporters has crashed. The CCEA also decided to double Exim Bank\u2019s authorised capital to Rs 20,000 crore. Briefing reporters after the Cabinet meeting, railway minister Piyush Goyal said the infusion would enable it to improve capital adequacy and support Indian exports with enhanced ability. The latest move comes after earlier attempts of the commerce ministry failed to persuade the RBI to use a portion of its foreign exchange reserves to give long-term loans to Exim Bank at concessional interest rates. The idea was to improve the agency\u2019s financial might so that it can lend to exporters at low interest rates but the central bank rejected the proposal. Export credit crashed 55.3% as of November 23 from a year before to just Rs 18,500 crore, even though overall priority-sector credit recorded an 8.4% rise, showed the RBI data. Wednesday\u2019s proposed infusion will also give an impetus to new initiatives such as supporting Indian textile industries, likely changes in the Concessional Finance Scheme, likelihood of new letters of credit in the future in view of the country\u2019s active foreign policy and strategic intent, Goyal added. Exim Bank primarily lends for exports from India including supporting overseas buyers and Indian suppliers for export of developmental and infrastructure projects, equipment, goods and services from India. Already, high borrowing costs are hurting exporters while poor capital base and lending limits of Exim Bank has severely undermined its abilities to finance large projects overseas, a core mandate of the bank. In recent years, Exim Bank officials had lost out opportunities to finance some projects, including L&T-led consortium\u2019s bid for the $1.5-billion metro contract in Saudi Arabia and a $600-million road contract in Doha by L&T. Also read: Where are jobs? Piyush Goyal retorts: Modi govt created enough jobs, data fails to show real picture While Exim Bank is allowed to lend only 10 times of its net-owned funds, China\u2019s Exim Bank has a leverage ratio of 77.5 times. This was also one of the reasons why the government infusion was required to improve the export credit agency\u2019s lending might.