PROJECT ON

EXPORT IMPORT BANK OF INDIA

(EXIM BANK)

BACHELOR OF COMMERCE-

BANKING & INSURANCE

SEMESTER V

2008-2009

SUBMITTED BY

SHILPA SONAWANE

ROLL NO: 55
 PROJECT ON

EXPORT IMPORT BANK OF INDIA

(EXIM BANK)

BACHELOR OF COMMERCE –
BANKING & INSURANCE
SEMESTER V

SUBMITTED
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF BACHELOR
OF COMMERCE – BANKING & INSURANCE.

BY
SHILPA SONAWANE
ROLL NO: 55
CERTIFICATE
 DECLARATION
I Miss.Sneha Sundrani , student of B.Com – Banking &
Insurance Semester V (2008-2009), hereby declare that I
have completed the Project on Customer Relationship
Management in Banks (Private and Public Sector) in the
academic year 2008.
The information submitted is true and original to the
best of my knowledge.

Sign
ature of Student

…………………
SHILPA SONAWANE

Roll No-55
 ACKNOWLEDGEMEN
T
Any accomplishment requires the effort of many people and this work is no
different.

This project would just not have been complete without the valuable contributions
from various people whom I have interacted with in the course of its completion. I
would first and foremost thank the Mumbai University for designing such a
specialized course. I am especially thankful to my project guide Ms. Sapna Malya
and our course co-coordinator Mrs. Heena Thakkar for her encouragement,
guidance and constant motivation which served as a driving force in the successful
completion of this project. I also thank our reverend principal Dr. Mrs. Indu
Shahani for giving me an opportunity to present a creative work in the form of
project.

I would like to thank all the five bank managers who provided me the primary
information. I also take this opportunity to express my sincere gratitude to the
library staff that has provided me right information and study material at the right
time.

Lastly I would like to thank my colleagues, my parents, my sister and all those
people who have lent me a helping hand in finishing this project, whose names are
too numerous to be mentioned here. It is said that “Gratitude is the hearts
memory”; well, the memory of all help and assistance acquired during the course
of this project will remain in my heart as gratitude forever………………….
 ORIGIN AND HISTORY

The Export-Import Bank Act, 1981:

An act to establish a corporation to be known as the Export-Import Bank of India

for providing financial assistance to exporters and importers, and for functioning as
the principal financial institution for co-ordinating the working of financial
institutions engaged in financing the export and import of goods and services with
a view to promoting the country’s international trade and for matters connected
therewith and incidental to.

History:

This Act extends to the whole of India. With effect from the date i.e. September
1981, as the Central Government by notification, appointed, a corporation Known
as the Export Import Bank of India was established for the purposes of this Act.

The Export Import Bank of India, commonly known as the EXIM Bank,
commenced operations in March 1982. It was set up so as to take over the
operations relating to export finance which the IDBI (Industrial Development Bank
of India) had been handling since the year 1970. Exim Bank acts as the apex
financial institution relating to financing for foreign trade. It provides financial
assistance by way of direct loans and advances for the purpose of export or import,
rediscounting of usance export bills for banks and finance for international trade
activities.

MISSION

Exim Banks mission is to facilitate globalization of Indian Business.

Exim Banks mission statement: “To develop commercially viable

relationships with externally oriented companies by
supporting their internationalization efforts, through a
diverse range of products and services.”

Objective
The objective of the bank is-

“… 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 country’s international trade…”

“… shall act on business principles with due regard to public interest” as Stated
In the Export-Import Bank Act,1981.
 OBJECTIVES

• To translate national foreign trade policies into concrete action points.

• To provide alternate financing solutions to the Indian exporter, aiding
him in his efforts to be internationally competitive.
• To develop mutually beneficial relationships with the international
financial community.
• To initiate and participate in debates on issues central to India’s
international trade.
• To forge close working relationships with other export development and
financing agencies, multilateral funding agencies and national trade and
investment promotion agencies.
• To anticipate and absorb new developments in banking, export financing
and information technology.
• To be responsive to export problems of Indian exporters and pursue
policy resolutions.
 The Organization: Objective, Vision & Functions

The Exim Bank aims to promote India's international trade. The Logo
reflects this.The Logo has a two-way significance. The import arrow is
thinner than the export arrow. It also reflects the aim of value addition
to exports.

The Organization:

Exim Bank is wholly owned by the Government of India. The authorized

capital of the Bank is Rs. 2000 Crores, of which and Rs. 1000 Crores
respectively, has been fully subscribed by the Central Government. The Bank
raises additional resources through borrowing from the Government of India,
from the RBI and from the market through the issue of bonds and debentures.
It borrows foreign currency form other countries as well. Exim bank is
managed by a Board of Directors, which has representatives from the
Government, Reserve Bank of India, Export Credit Guarantee Corporation
(ECGC) of India, a financial institution, public sector banks, and the business
community.

THE PEOPLE
Exim bank is a virtual melting pot of thriving minds from a variety of disciplines.
The bank has a total staff of 214 hailing from backgrounds as diverse as banking,
engineering, business management, information technology, accountancy,
economics and liberal arts. What they all have in common, however, is an
underlying passion for professional excellence. The creative synergy produced by
a brain trust composed of individuals with vastly different styles of thinking has
helped the Bank to constantly innovate, and come up with the original solutions –
solutions beyond banking.
 CORPORATE PHILOSOPHY
Exim banks corporate philosophy is built on two pillars:

People orientation and customer focus.

The Banks believes that its people are its key resource. Therefore, the
Banks seeks to develop its human resource by motivating them through
challenging assignments, upgrading their skills through training
programmes, and recognizing professional excellence.

We follow an office- oriented; non-hierarchical work culture and open

office plan facilitating a free flow of interaction between and within
groups. As a model corporate citizen, the Bank maintains an equal ratio of
men and women (1:1) .the Banks high level of office automation, and a
lean and multi-skilled staff enables optimum efficiency and profitability.
 Customer-responsiveness is germane to the Banks philosophy. The Bank
constantly seeks to innovate and improve its products, processes and
delivery mechanisms, and thereby minimize response time and maximize
customer equity. Our interactive mode of analysis and decision-making,
through multi disciplinary cross-functional groups ensures that the best
possible business solution is offered to the customer.

GLOBAL NETWORKING

Exim bank is quite unique in its global and national network of institutional and
professional linkages .Our five overseas offices-at Dubai, Johannesburg,
London, Singapore and Washington D.C.-have forged strategic institutional
linkages for the bank with:

• Multilateral agencies such as World Bank, Asian development

Bank;
• Export credit agencies;
• Trade and investment promotion agencies abroad; and
• Trade and industry association in India.

The banks extensive global network, supported by the Indian missions abroad
makes it uniquely capable of offering advisory services to Indian companies
looking for marketing opportunities, buyer information, technology suppliers
and partners for overseas and domestic joint ventures. Further, our overseas
 office enables us to garner economic and commercial intelligence on countries,
companies and projects, assess credit risks, review competitive export practices
and provide alerts on new export opportunities.

The Nine Domestic Offices of the Bank

Helps to respond to regional development activities in the export sector. They

identify special needs of the export business through close interaction with existing
and prospective clients and suggest innovative instruments appropriate to the
regions potential. They also regularly interact with commercial development
/government agencies, and strengthen the banks policy mechanism with their
critical inputs on market perceptions and the export environment.

Detailed appraisals, legal documentation, initial processing of loan disbursement

requests, and monitoring of loans, including site visits, inspection of assets charged
to the bank and overall monitoring of the performance of the companies are also
done at domestic offices.

SOURCES OF FUNDS…
As at March 31,2006,the bank had a paid up capital of Rs 9.5 billion, and its net
worth was rs27.20 billion. They also raise funds from domestic and international
markets.

ORGANISATIONAL SET-UP
Exim bank is managed by a Board of Directors, which has high level
representatives from the Government, Reserve Bank of India, Export
Credit Guarantee Corporation of India, public sector Banks, academia and
business community. With its headquarters in Mumbai, the bank has nine
regional offices overseas.

The banks functions are segmented into several operating groups including

 Corporate banking group which handles a variety of financing

programmes for, Export Oriented Units (EOUs), importers, and investment by
Indian companies.

 Project finance/trade finance group which handles the entire range of

export credit services such as suppliers credit, pre-shipment credit, buyers
credit, finance for export of projects and consultancy services, guarantees,
forfeiting.
 Lines of credit group- lines of credit (LOC) is a financing mechanism
that provides a safe mode of non –recourse financing option to Indian
exporters, especially to SMEs, and serves and an effective market entry tool.
Exim banks extends LOCs to sovereign governments, central banks, regional
development banks, overseas financial institutions and other entities overseas,
to enable buyers in those countries, to import equipment, goods and services
from India, on deferred credit terms.
 Agri business group, which has been put in place
to spearhead the initiative to promote and support Agri –exports. The
Group handles projects and export transactions in the agricultural sector
for financing.

 Small and medium enterprises group has been

established to cater to the specific financing requirements of export
oriented SMEs.The group handles credit proposals from SMEs under
various leading programmes of the bank.
Export services group offers a variety of advisory and value-
added information services aimed at trade and investment
promotion.

Apart from these, there are Support Services Groups, which include:
Research and Planning, Corporate Finance, Loan recovery, Internal
Audit, Management Information Services, Risk Management,
Information Technology, Legal, Human Resources Management and
Corporate Affairs.
Evolving Vision

Functions:

1) Financing of exports and imports of goods and services, not only of

India but also of third world countries.
2) Financing of exports and imports of machinery and equipment on lease
basis.
 3) Financing of joint ventures in foreign countries.
4) Providing loans to Indian parties to enable them to contribute to the
share capital of joint ventures in foreign countries.
5) Undertake limited merchant banking functions such as underwriting of
stocks, shares, bonds or debentures of companies engaged in export or
import; and
6) Provide technical administrative and financial assistance to parties in
connection with export and import.

THE ROLE…
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.

COORDINATION ROLE
Exim bank is the coordinator of the working group mechanism for clearance
of projects and services exports and deferred payment exports (for amounts
above a certain value-currently US$ 100 million). The working group
comprises Exim bank, Government of India Representatives (Ministries of
Finance, Commerce, External Affairs), and Reserve Bank of India; export
credit Guarantee Corporation of India limited and commercial banks that are
authorized foreign exchange dealers.
This inter-institutional Working Group accords clearance to contracts (at the
post award stage) sponsored by commercial banks or Exim Bank, and operates
as one- window mechanism for clearance of term export proposals. On its
own Exim bank can now accord clearance to project export proposals up to
US $100million in value.
 EXPORT CREDIT.

Exim bank offers the following export credit facilities, which can be availed of by
Indian companies, commercial banks and international entities.

FOR INDIAN COMPANIES EXECUTING CONTACTS OVERSEAS…

 • PRESHIPMENT CREDIT.
Exim banks pre-shipment credit facility, in Indian rupees and foreign
currencies, provides access to finance at a manufacturing stage, enabling exporters
to purchase raw materials and other inputs.

• SUPPLIERS CREDIT

This facility enables Indian exporters to extend term credit to importers (overseas)
of the eligible goods at the post shipment stage.

FOR PROJECTS EXPORTERS.

Indian project exporters incur Rupee expenditure while executing overseas
project export contracts i.e. costs of mobilization/acquisition of materials,
personnel and equipment etc. Exim Bank's facility helps them meet these expenses.

For Exporters of Consultancy and Technological Services.

Exim Bank offers a special credit facility to Indian exporters of consultancy and
technology services, so that they can, in turn, extend term credit to overseas
importers.

Guarantee facilities.
Indian companies can avail of these to furnish requisite guarantees to facilitate
execution and export contracts and import transactions.
Forfeiting.
Forfeiting is a financing mechanism that enables a company to convert credit sale
to cash sale, on “without recourse” basis. Exim bank acts as facilitator for the
Indian exporter, enabling him to access the services of an overseas forfeiting
agency.

FINANCE FOR EXPORT ORIENTED

UNITS.

TERM FINANCE FOR EXPORTING COMPANIES

 • Project Finance
• Equipment Finance
• Import of Technology & Related Services
• Domestic Acquisitions of businesses/companies/brands
• Export Product Development/ Research & Development
• General corporate finance.

WORKING CAPITAL FINANCE FOR EXPORTING

COMPANIES.

• Funded
o Working Capital Term Loans [< 2 years]
o Long Term Working Capital [up to 5 years]
o Export Bills Discounting
o Export Packing Credit
o Cash Flow financing.

• Non-funded
o Letter of credit limits
o Guarantee limits

Working Capital Finance For Non- Exporting

Companies.

• Bulk Import of Raw Material.

Term Finance For Non- Exporting Companies.

• Import of Equipment

Export Finance.

• Pre-shipment Credit
 • Post Shipment Credit
• Buyers' Credit
• Suppliers' Credit [including deferred payment credit]
• Bills Discounting
• Export Receivables Financing
• Warehousing Finance
• Export Lines of Credit (Non-recourse finance)

Equity Participation In Indian Exporting Companies.

To part finance project expenditure (Project, inter alias, includes new project/

expansion/ acquisition of business/company/ brands/research & development).

Overseas Investment Finance

 • Finance for Indian Company's equity participation in the overseas Joint
Venture (JV)/ Wholly Owned Subsidiary (WOS)

• Direct Finance (Term & Working Capital) to the overseas JV / WOS

• Finance (for equity/debt component) for acquisition of overseas businesses /

companies including leveraged buy-outs including structured financing options.

Direct Equity by Exim Bank in the overseas JV/ WOS of an Indian Company.

Export Import Bank of India - Small & Medium Enterprises &

Agricultural finance

Definition of SMEs in India and World:

In India the small and medium enterprises are not well defined. The internal group
set up by the Reserve Bank of India has recently recommended that the units with
investment in plant and machinery in excess of SSI limit and upto Rs. 10 crores
may be treated as medium enterprises. The definitions of ‘small’ and ‘medium’
sized enterprises differ from one country to another. SMEs have been defined
against various criteria such as the number of workers employed, volume of output
or sales, value of assets employed, and the use of energy. Organization for
Economic Cooperation and Development (OECD) defines establishments with
upto 19 employees as ‘very small’, between 20 and 99 employees as ‘small, from
100 to 499 employees as medium and over 500 employees as large enterprises.
However, many establishments in some developing countries with 100 to 499
employees are regarded as relatively ‘large’ firms. Multilateral Investment
Guarantee Agency (MIGA) has recently developed a guarantee programme, called
the Small Investment Programme (SIP) that is specifically designed for SMEs.
MIGA defines SMEs, for coverage under this programme, as firms with not more
than 300 employees, value of assets not exceeding US $ 15 million and annual
sales not exceeding US $ 15 million. The European Union defines SMEs that have
employees of less than 250, with a turnover not exceeding Euro 50 million. Thus
the definition of SME varies from country to country and from region to region.
The importance of SME sector is well-recognized world over owing to its
significant contribution in achieving various socio-economic objectives, such
as employment generation, contribution to national output and exports,
fostering new entrepreneurship and to provide depth to the industrial base of
the economy. India has a vibrant SME sector that plays an important role in
sustaining economic growth, increasing trade, generating employment and
creating new entrepreneurship in India.

Importance of the SME sector:

The SSI sector in India employs around 26 million people and is involved with the
production of over 7500 industrial items with the product range varying from very
simple items produced with traditional technology to high tech products. At
present, the SSI sector accounts for over 90% of industrial units in the country,
40% of value addition in the manufacturing output and approximately 35% of
India’s exports. SSI sector in India has been exhibiting a striking export
performance. Barring few years, exports have grown double digit in the last 10
years. Major sectors contributing to SSI exports include readymade garments
(27%), engineering goods (14.5%), chemicals & pharmaceuticals, electronics &
computers, and processed foods (11% each).
Exim Bank and SMEs:

Indian SMEs require business advisory services to enhance their

international competitiveness in a highly competitive globalising world. The
SMEs find the services of reputed national and international consultants as
not cost effective and often, not adequately focused. Recognizing this
knowledge gap, Exim Bank of India has been endeavouring to provide a suite
of services to its SME clients. These include providing business leads,
handholding during the process of winning an export contract and thus
assisting the generation of export business on success fee basis, countries/
sector information dissemination, capacity building in niche areas such as
quality, safety, export marketing, etc. and financial advisory services such as
loan syndication, etc.

In the past, Exim Bank has implemented a number of innovative programmes

focusing primarily on SMEs. The Bank, in the past, has operated an Agency Line
of Credit for IFC and an Export Marketing Programme for the World Bank, which
are targeted towards SME sector. The Bank proactively assists SME units in
establishing their products in international markets. Exim Bank’s Lines of Credit
help SMEs to offer competitive credit term to the buyers and to explore newer
geographical markets. Recently, the Bank has signed a Memorandum of
Cooperation with the International Trade Centre (ITC), Geneva, to implement the
Enterprise Management Development Services (EMDS) programme, for
supporting SMEs in their globalisation efforts. This initiative is being launched by
ITC for the first time in any country.

AGRI FINANCE
 The globalization and post-WTO scenario offers considerable scope for exports
of Indian agricultural products. Exim Bank has a dedicated Agri Business Group to
cater to the financing needs of export-oriented companies dealing in agricultural
products.

Financial assistance is provided by way of term loans, pre-shipment/post- shipment

credit, overseas buyers' credit, bulk import finance, guarantees etc. Term loans
with varying maturities are provided for setting up processing facilities, expansion,
modernization, purchase of equipment, import of equipment/technology, financing
overseas joint ventures and acquisitions etc.

The Bank has strong linkages with other stakeholders in Agri sector such as
Ministry of Food Processing Industries, GoI, NABARD, APEDA, Small Farmers'
Agri-Business Consortium (SFAC), and National Horticultural Board etc. Apart
from financing, the Bank also provides a range of advisory services to Agri
exporters. Term loans with varying maturities are provided for setting up
processing facilities, expansion, modernization, purchase of equipment,
import of equipment/technology, financing overseas joint ventures and
acquisitions etc. The Bank has strong linkages with other stakeholders in Agri
sector such as Ministry of Food Processing Industries, Government of India,
NABARD, APEDA, Small Farmers' Agri-Business Consortium (SFAC), and
National Horticultural Board etc. Apart from financing, the Bank also
provides a range of advisory services to Agri-exporters. The Bank also
publishes a number of Occasional Papers, Working Papers on export potential
of various sub-sectors in agriculture and a bi-monthly publication in different
languages on global scenario in agri-business and opportunities therein.
Initiatives by Exim Bank for both Small and Medium Enterprises & Agri
finance:

• Exim Bank has signed a Memorandum of Cooperation with DHAN

Foundation, Madurai (a leading NGO covering 3 lakh families in 4
states) for advisory and financial support for export related activities
for their grass root enterprises
• Set up units to produce value-added products from organic tamarind
grown in the area
• Steps are on to set up an export oriented coco-peat projects
• To market products made out of palm leaves and handmade papers in
Europe through our overseas offices.

1) To devise marketing strategy for marketing local handicrafts to foreign

tourists through 5 star hotels.

2) Exim Bank has signed Memorandum Of Cooperation with BASIX,

Hyderabad. BASIX promotes development for the rural poor and
women, mainly through Micro-credit and Micro Finance. Highlights of
MoC:-
a) joint consultancy studies,
b) productivity enhancement,
c) market linkages, capacity building,
d) entrepreneurship development,
e) commercialization of India's rural sector in overseas market
 f) technical assistance to micro and small-enterprises in the farm and non-
farm sectors in other developing countries,

3) Exim Bank along with BASIX to organise skill upgradation workshop for
handloom weavers in Mahabubnagar Mandal & for tussar silk weavers
in Kosgi, Andhra Pradesh

4) BASIX in association with Govt. of Rajasthan and UNDP is engaged in

discussions for developing export clusters in Rajasthan including Stone
Carving and Dari Cluster in Lawan, Dausa and Pottery Cluster in Basawa.
a) Exim Bank is engaged in helping the clusters in product development
and establishing export market linkages, organizing workshops and
training programs for skill upgradation of rural artisans.
b) Exim Bank’s Dubai ( formerly Budapest ) office helped in exporting
sandstone slabs to Hungary

5) Exim Bank has signed a Memorandum of Cooperation with Uravu (an

NGO involved in employment generation programs in the bamboo
sector for tribal & poor families in Waynad, Kerala) to provide larger
visibility to bamboo-based handicraft products. Highlights of MoC:-

a) Facilitate promotion of Uravu's or its associates' products in overseas

market.
 b) Identification of suitable buyers / partners by Exim Bank for
facilitating export business of Uravu and its associates.
c) Exchange of information on international markets for various products,
technology, trade, business and investing opportunities to facilitate
increased co-operation for commercial exploitation in overseas markets.

d) Conducting joint studies and research in areas of mutual interest

6) Exim Bank has initiated discussion with handloom weavers cooperative

societies in Fulia (West Bengal) for marketing their products overseas
7) National Institute of Fashion Design, Handloom & Handicraft Export
Promotion Council and Directorate of Handloom, Govt. of West Bengal
participated in the discussions at Exim’s office in Kolkata
8) One suggestion under discussion is to form a marketing company with
equity participation by the weavers co-op, West Bengal Govt. and Exim
Bank which will take up marketing of the products
9) Feasibility report under preparation by Indian Institute of Social Welfare
& Business Management, Kolkata
10) Exim Bank is also associated with rural knowledge centre of M.S.
Swaminathan Research Foundation for providing technology inputs to
rural areas.

Recent Developments :
EXIM’s focus on SMEs

Special Line of Credit from ADB: The Bank is negotiating a long term Line
of Credit of US$ 250 mn. From the Asian Development Bank, without
Central Government guarantee, for extending loans to SMEs . The Bank will
have an option to draw the funds in different currencies, as per the needs of
its customers.

Innovative Programme for SMEs

The Bank has entered into a cooperation arrangement with International

Trade Centre (ITC), Geneva, for implementing a unique Enterprise
Management Development Services (EMDS) program, which is an IT based
solution provider to enable small enterprises to prepare business plans with
international market in focus. This is a pioneering initiative for supporting
SMEs and for providing term loans and export finance facilities to the
identified units to help them in their globalisation efforts. The Bank has
partnered ITC in implementing this project. The Bank thus supports small
enterprises through capacity building and assistance in formulation of viable
proposals. It is envisaged that the learning from this programme would be
transferred to other developing countries, and thus assist in capacity creation
and institution building in the global arena.

The Bank has partnered the Commonwealth Secretariat in the Commonwealth

– India Small Business Competitiveness Development Programme. The
objective of the programme is to undertake capacity development initiative
that promotes economic development (increased employment, investment,
trade and economic activity) in Commonwealth member states by providing
competitive strategies and policies on SME development to practitioners and
policy makers, and to build and develop institutional capacity.

ADFIAP Development Award

The Association of Development Financing Institutions in Asia and the

Pacific (ADFIAP) Development Award recognises and honours ADFIAP
member institutions, which have assisted projects that have created a
development impact in their respective countries. Awardsare given to
member institutions, which have implemented or enhanced outstanding and
innovative development projects during the year. The Bank has been
conferred the 2008 “SME Development Award”.

The Award is in recognition of the Bank’s “Enterprises Management

Development Services (EMDS)” programme, an IT based solution provider to
enable small enterprises to prepare business plans with international market
in focus

Debt restructuring scheme for small and medium

enterprises
Publications
• Export Performance of Small and Medium Enterprises in India in research
brief.
 • Occasional Paper: Institutional Support to SMEs A Study of Trade and
Investment Potential

• Occasional Paper: Institutional Support Systems for SMEs in India and

International Experiences

FILM FINANCE

The bank has till date-sanctioned loans more than Rs 33.15 crores for film
production .the first three films financed by Exim bank has been commercially
successful across India and overseas market.
FILMS FINANCED BY EXIM BANK.

• Honeymoon Travels Pvt. Ltd.

• Kabul Express
• Dhoom -2
• Don - The Chase Begins Again
• Fanaa
• Bunty Aur Babli
• Salaam Namaste
• Veer Zaara
 EXPORT CREDITS

Exim bank offers the following Export Credit facilities, which can be availed
of by Indian companies, commercial banks and overseas entities.

FOR COMMERCIAL BANKS:

Exim bank offers Rediscounting facility to commercial banks, enabling them

to rediscount export bills of their SSI customers, with usance not exceeding 90
days.
We also offer Refinance of Suppliers Credit, enabling commercial banks to
offer credit to Indian exporters of eligible goods, who in turn extend them
credit over 180 days to importers overseas.

OTHER FACILITIES FOR INDIAN COMPANIES:

Indian companies executing contracts within India, but which are financed by
multilateral finance agencies, can avail of credit under our finance for deemed
exports facility, aimed at helping them meet cash flow deficits.

FOR OVERSEAS ENTITIES

Buyer’s credit:

Overseas buyers can avail of Buyers Credit from Exim bank, for import of
eligible goods from India on deferred payment terms.

Line Of Credit

Introduction
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 goods and services from India on
deferred credit terms. The Indian exporters can obtain payment of eligible value
from Exim Bank, without recourse to them, against negotiation of shipping
documents. LOC is a financing mechanism that provides a safe mode of non-
recourse financing option to Indian exporters, especially to SMEs, and serves as an
effective market entry tool. Exim Bank extends LOCs, on its own, as well as, at the
behest of Government of India.

How does it work?

1. Exim Bank signs LOC Agreement with overseas Borrower Institution
(Borrower) and announces the availability of LOC for utilization, when the
Agreement becomes effective.

2. Exporter checks with Exim Bank, available amount under the LOC and quantum
of service fee payable to Exim Bank, if any, and negotiates contract with Importer.

3. Importer approaches the Borrower for approval of the contract.

4. Borrower appraises the proposal. If satisfied, approves the contract and refers to
Exim Bank for concurrence for inclusion of contract for being financed under the
LOC.

5. Exim Bank accords approval to the contract, if in conformity with the terms of
LOC. Exim Bank conveys contract approval to the exporter and the Borrower.

6. The Importer arranges remittance of advance payment to the Exporter and also
opening of a Letter of Credit, which states that the contract is covered under Exim
Bank's LOC to the Borrower and reimbursement will be by Exim Bank for the
Eligible Value of Credit, upon compliance with stipulated conditions therein.

7. Exporter executes the contract/ships the goods/provides services.

8. Exim Bank/commercial bank in India, designated as the Negotiating Bank

negotiates shipping documents and pays the exporter.

9. Exim Bank reimburses the Negotiating Bank, on receipt of valid claim and
service fee, as applicable, by debit to the LOC account of the Borrower.

10. Borrower repays Exim Bank on due dates.

Procedural flow chart

Benefits to the Indian Exporter:

Under Exim Bank's LOCs, the Indian exporters can obtain payment of
eligible value from Exim Bank, without recourse to them, against
negotiation of shipping documents. The Indian exporter does not carry any
credit risk either on the importer or the importer's country, whilst the
overseas importer enjoys deferred credit facility. Thus, LOC is a safe mode
of non-recourse financing option to the Indian exporter and serves as a
 market entry tool for India's exports. The Indian exporter can also increase
his export volumes by offering deferred credit, where required.

Benefits to Overseas Importer of goods and services:

Exim Bank has been using the LOC mechanism for promoting India's exports to
the traditional as well as new markets in developing countries, which need deferred
credit for buying Indian machinery, goods and services. As the LOC is extended by
Exim Bank on internationally competitive terms, the overseas importer of Indian
goods is allowed access to the credit facility at competitive interest rates. The
overseas importer and the Indian exporter do not have to negotiate credit terms
separately as the credit arrangement between Exim Bank and the overseas
borrower financial institution is already in place.

Credit period allowed under the LOC Eligible Goods:

Capital goods, plant and machinery, industrial manufactures, consumer durables
and any other items eligible for being exported under the 'Exim Policy' of the
Government of India.

Interest rate the overseas importer of Indian goods has to pay

The overseas importer of Indian goods has to approach the overseas borrower
financial institution/recipient of Exim Bank's LOC, for approval of his proposal for
import of Indian goods on deferred credit terms. The interest rate that the importer
will need to pay to the recipient of Exim Bank's LOC, will depend on various
factors such as the cost of fund, the currency of credit, tenor of credit, security
offered by the importer, the risk perception of the importer and the interest rate
structure prevalent in the country. It may however be mentioned that Exim Bank's
interest rates on LOCs being competitive, the importer would normally have to pay
interest rate lower than what he would otherwise pay to his Bank on similar credits.

Charges payable by the Indian exporter to Exim Bank

In respect of certain LOCs, the Indian exporter has to pay a service fee to Exim
Bank. The exporter should check in advance with Exim Bank the
quantum/percentage of service fee payable. In respect of LOCs extended by Exim
Bank, at the behest of Government of India, no service fee is normally payable by
the exporter to Exim Bank.

Minimum value of contract for being eligible for coverage under the LOC

Most of the LOCs stipulate a minimum contract value as US$ 50000. However,
under certain LOCs, the minimum value of contract could be different. Exporters
would be well advised to check the particulars of the individual LOC with Exim
Bank.

Generally, export of capital goods and plant and machinery is allowed on credit
terms of upto 5 years, whereas the export of industrial manufactures, consumer
durables, raw materials and commodities is allowed on credit terms of upto 2
years. However, the credit period allowed under each LOC could be different.
There are certain short-term LOCs which provide for credit period of 1 year, and
there are certain LOCs which permit credit period beyond 5 years. Exporters are
advised to check the details with Exim Bank, in advance. In respect of LOCs
extended by Exim Bank, at the behest of Government of India, credit period ranges
from 8 years to 20 years depending on the caegories of countries, based on their
levels of incomes and external debt.

The stage at which the Indian exporter should contact Exim Bank

The Indian exporter should contact Exim Bank before finalizing the price
negotiation with his prospective importer, if the transaction is intended to be
covered under Exim Bank's LOC. The exporter should ascertain details such as the
service fee payable to Exim Bank, the credit period permissible under the LOC, the
payment procedure involved and the contact person/department in the overseas
borrower institution/recipient of LOC. In respect of certain LOCs especially those
extended by Exim Bank, at the behest of Government of India, sectors/projects
could be pre-identified.

ECGC cover

As the LOC is a non-recourse financing option to the Indian exporter, he does not
have to obtain any ECGC cover.
Recent Developments And News Highlights :

Exim bank signs agreement with African counterpart

New Delhi, March 20,2008: Exim Bank of India has signed an agreement with the
African Export-Import Bank or Afreximbank for a Line of Credit to the tune of
$30 million to be provided for financing India’s exports to Africa.

The agreement was signed at the 4th CII-Exim Bank conclave on India-Africa
Project Partnership 2008 in New Delhi on. The agreement was signed by Mr. T C
Venkat Subramanian, Chairman and Managing Director of Exim Bank and Jean-
Louis Ekra, President of Afreximbank. This agreement will facilitate and boost
India’s exports to member states of Afreximbank. The Line of Credit affords a risk
free, non-recourse export financing option to Indian exporters. Exim Bank is a
non-regional shareholder of Afreximbank which represents 38 member-states
across Africa.

Exim Bank Of India And Lao Pdr Ink Credit Agreement

Export-Import Bank of India (Exim Bank) and the Government of Lao People's
Democratic Republic have signed a Line of Credit (LOC) Agreement for US$ 33
mn during the State Visit of the President of Lao PDR to India. The LOC
Agreement was signed in New Delhi, on Wednesday, August 27, 2008, by Mr.
S.R. Rao, Executive Director, on behalf of Exim Bank of India, and H.E. Mr.
Somdy Douangdy, Minister of Finance, on behalf of Lao PDR, in the presence of
Hon'ble Prime Minister of India, Dr. Manmohan Singh, and the President of Lao
PDR, H.E. Mr. Choummaly Sayasone.

This Facility, extended at the behest of Government of India, is the first ever Line
of Credit by Exim Bank to Lao PDR. The LOC will be utilised to finance the
Paksong S/S-Jiangxai 115 kV double circuit Transmission Line project, Nam Song
7.5 MW Hydropower project and equipment for Rural Electrification Phase 2
project in Lao PDR. Under the LOC, Exim Bank will reimburse 100% of contract
value the Indian exporter, upfront upon the shipment of goods. Besides promoting
India's exports, Exim Bank's LOCs enable demonstration of Indian expertise and
project execution capabilities in emerging markets.

With the signing of this LOC Agreement, Exim Bank has now in place 101 Lines
of Credit, covering over 90 countries in Africa, Asia, Latin America, Europe and
the CIS, with credit commitments amounting to US$ 3.32 bn, available for
utilization for financing exports from India. Exim Bank's LOCs afford a risk-free,
non-recourse export financing option to Indian exporters.
FINANCE FOR EXPORT ORIENTED UNITS (EOUs)

For the purpose of our financing, an export oriented company is defined as

any company with a minimum export orientation of 10% of net sales, or
annual export sales of Rs 5 crores, whichever is lower.

PROJECT FINANCE

For setting up of EOUs:

Exim bank offers term loans for setting up of new projects, and acquisition of
assets for modernization/upgradation/exansion of existing units. The bank also
extends 100% refinance to commercial banks, for term loan sanctioned by the
lending bank to an EOU.

For textile and jute industries:

The bank also extends finance to eligible units in textile and jute industries
under The Technology Up gradation Fund Scheme, to enable them to
upgrade their manufacturing facilities.

For software industry:

The bank offers a comprehensive financing /services package for the software
industry. These include project/equipment finance, working capital finance,
and overseas investment finance, besides support for obtaining
product/process certification, export marketing and export product
development.

To address the perceived constraint in the availability of trained software

professionals, Exim Bank extends term loans to software exporters for
establishment/expansion of software training institutes. Further, the bank
also facilitates setting up of software technology parks (STPs).

For Indian companies involved in port development and related

activities:
Exim Bank extends term loans to Indian companies involved in construction
of ports/jetties, and for acquisition of fixed assets for stevedoring, cargo
handling, storage and related activities like dry docks and ship breaking.

WORKING CAPITAL FINANCE.

Exim Bank provides term loans (of 1year, 1-2years,and up to 5 years tenor) to
eligible EOUs, to help them meet their working capital requirements.

OTHER FACILITIES

Finance for R & D and Export Product Development:

Exim bank offers term loans to EOUs, for development of new technology to
satisfy domestic and international environment and standards, and to help
them develop and/or commercialize new product/process applications.

Finance for service sector:

Services sectors financed by Exim Bank include entertainment, health care,

hospitality and shipping. Exim Bank has entered into the business of film
financing on a very selective basis to cover, inter alia, film production and
finance for distribution in overseas markets. The banks approach towards film
financing is to focus on films produced specifically for international audiences
and/or film projects, which have foreign exchange earning potential. The
banks film finance is targeted to select production and distribution houses
with proven track record.

Natural resources:

Exim bank selectively provides term loans to Indian companies in their

endeavor to acquire overseas natural resources in terms of acquiring
mining/exploration rights in overseas locations. Exim; finance
will be available to Indian companies for acquisitions of such
rights either on its own or in joint venture with an overseas
partner, subject to a reasonable proportion of the resources
being destined for India.

Underwriting:

Exim bank extends underwriting commitment to Indian exporters, to help

them raise finance from capital markets through public/rights issues of equity
shares /debentures.

Export Marketing Finance:

Exim bank offers term loans to Indian companies, to aid them in their efforts
to penetrate and retain their presence in overseas markets, particularly in
developed countries.
Import loans:

Exim bank finances bulk imports of consumable inputs and canalized items
undertaken by manufacturing companies.

Guarantee facility:

Exim bank issues different kinds of guarantees for EOUs.These include: a)

export obligation guarantees; b) deferred payment guarantees; c) guarantees in
favor of commercial banks/lending institutions abroad on behalf of Indian
exporters.

FINANCE FOR VENTURE

OVERSEAS.
The bank has a comprehensive programme in terms of equity finance, loans,
guarantees and advisory services to support Indian outward investment.

Exim bank offers term loans to Indian companies, both for equity investment
in their ventures overseas as well as for on lending purposes.

Besides, Exim Bank also undertakes Direct Equity Stake in Indian Ventures
Abroad, to enable Indian companies to supplement their equity with Exim
Banks equity contribution.
EXPORT SERVICES

Exim bank offers a diverse range of information, advisory, and support

services, which enable exporters to evaluate international risks, exploit export
opportunities and improve competitiveness.

For Multilateral Agencies Funded Projects Overseas (MFPO):

Exim bank offers value added information and support services to Indian
companies seeking business in business funded by multilateral agencies such
as World Bank, Asian Development Bank, African Development Bank,
European Bank for Reconstruction and Development, and other official
Development Agencies like the Japan Bank for International Cooperation.

Services offered include:

• Identification of business opportunities in funded projects.

• Details on specific project of interest.
• Information on procurement guidelines, policies and
practices of multilateral agencies.
• Advice on preparation of Expression of Interest, Capability,
Profile etc.
• Advice on bids, with regard to bid evaluation, review of bid
documents, etc.
Apart from these we also offer support services, such as liaising with Indian
missions, monitoring bid performance, assistance in prequalification etc.

Commercial services:

Exim bank undertakes customized research on behalf of interested companies,

in areas such as establishing market potentials, defining marketing
arrangements, and specifying distribution channels. We also assist companies
in developing export market entry plans, obtaining quality certifications and
display of their products in our overseas offices.

Country profiles:

Exim bank also undertakes country profiles, which assess the economic,
political, currency and credit risks involved, along with the export
opportunities in the country concerned.

Financial counseling:

Exim bank offer advice on how to access foreign currency finance from
multilateral institutions and import lines of credit, trade finance alternatives,
collection/payment systems, as well on the credit worthiness of business
entities and banks.

Internationalization support:

Exim bank helps in identifying technology suppliers, partners, and in

consummation of domestic and overseas joint ventures, through its network of
alliances and its overseas offices. It also advice companies on regulatory
clearances, and facilitate tying-up finance for equity and working capital.

Information access:

Exim bank issues business opportunities alerts, which communicate business

leads, acquisition opportunities, industry trends as well as collaboration
opportunities.

Building export capability:

Our Eximius Learning Centers in Banglore, Ahmedabad and Pune organize

training programmes, workshop and seminars for exporters. These
programmes, often on sector-specific issues, are conducted buy international
experts from trade promotion organizations and multinational companies.

The bank also carries out research on issues related to international trade,
economics and sector/product/country studies, which it publishes in the form
of Occasional Papers and Working Papers.
The bank disseminates information on export opportunities and highlights
development that has a bearing on Indian exports, through its quarterly
bulletin, Eximius: Export Advantage.

Besides, this publication also carries a regular feature, country scan, which
gives update on the trade/investment climate in various countries.

The bank also brings out a bi-monthly publication titled “Agri Export
Advantage” in English, Hindi and 10 regional languages.

The bank supports three quarterly publications viz ‘Indo –African business”,
“Indo-LAC business” and “Indo-CIS Business”. Exim Banks commitment
to promoting and supporting trade with the African, LAC CIS regions.

International merchant banking services:

Exim bank provides advisory services to Indian exporters to

enable them to offer competitive financial packages when they
bid for exports.
 EXIM BANK AS AN INTERNATIONAL CONSULTANT.

Exim bank shares its expertise in the creation and operation of a financial
institution in a developing country, with countries endeavoring to set up
institutional infrastructure for international trade. Our activities in this regard
includes:
• Feasibility study for establishment of an export credit and guarantee
facility for Gulf Co-operation Council (GCC) countries.
• Setting up the Afriexim Bank, Exim Bank in Malaysia, and the export
credit guarantee company in Zimbabwe.
• Designing and operational sing of export financing programmes in turkey
and South Africa.
• Inputs regarding export marketing/export development for Armenia,
Vietnam and Ukraine.
• Feasibility study, undertaken on the behalf of the government of
Mauritius, for “projecting Mauritius as an investment hub for Indian firms.
JOINT VENTURES

Global procurement consultants limited (GPCL) is a successful consultancy

company, promoted by Exim bank in 1996,in partnership with leading private and
public sector consultancy firms in India. GPCL provides procurement related
services particularly related to multilateral agencies such as World Bank, Asian
development bank and African development bank.

Global trade finance limited (GTF), a joint venture which had its shareholders,
Exim bank; FIM bank, Malta; and international finance corporation, Washington
and bank of Maharashtra commenced its business in September 2001.GTF offers
factoring for export and domestic receivables with credit protection. The focus of
GTF’S activities is on market driven export-financing solutions for small and
medium sized Indian firms.
PROMOTIONAL PROGRAMMES
Promotional activities:

Exim Bank conducts Research Studies on products, sectors, countries, macro

economic issues relevant to international trade and investment. These include your,
 a) Sector studies assessing export potential: the sectors covered are
Computer Software, Floriculture, Medicinal Plants, Steel, Jute, Sports
Goods, Machine Tools, Organic Products, Chemical and Pharma.

b) Bilateral trade and investment studies: Kazakhstan, Kyrgyz

Republic, Uzbekistan- Trade Potential. Israel, Sri Lanka, Australia &
New Zealand -Trade & Investment Potential

c) International trade related studies: Transaction Costs of Indian

Exports- An Analysis, Business Practices of Successful Indian Exporters

The Bank disseminates on export opportunities and highlights developments

that have a bearing on Indian exports, through its quarterly bulletin, Eximius:
export advantage. Its Eximius: Export advantage publication also carries a
regular feature, Country Scan, which gives updates on the trade/investment
climate in various countries. The Bank supports three quarterly publications
viz. The Bank also brings out a bi-monthly publication titled Agri-Export
Advantage in English, Hindi and 10 regional languages. The bank supports
three quarterly publications viz. Indo-Africa Business, Indo – Latin America
Business, and Indo- CIS business. Support with these magazines
demonstrates Exim Bank’s commitment to promoting and supporting the
trade with Africa, Latin America and CIS regions.

Award for Business Excellence:-

Exim Bank, in association with the Confederation of Indian Industry (CII),
presents as Annual Award for Business excellence for the best TQM practices
adopted by an Indian company. The high performance standards set down in
order to qualify for the Award serve to foster strong commitments to the
TQM in the company’s journey towards Business Excellence.

EXIM BANK INTERNATIONAL ECONOMIC DEVELOPMENT

RESEARCH ANNUAL (IEDRA) AWARD, 2008 :-

In commemoration of Jawaharlal Nehru Birth Centenary (1889-1989)

THE AWARD

Export-Import Bank of India has instituted an Annual Award for research in

International Economics, Trade & Development and Related Financing. The
objective is to promote research in International Economics, Trade &
Development and Related Financing by Indian nationals at universities and
academic institutions in India and abroad. The Award will consist of a sum of
Indian Rupees One Hundred Thousand and a Citation. The Award was
initiated in commemoration of Jawaharlal Nehru Birth Centenary (1889-
1989).

THE ENTRY

Research work by Indian nationals in International Economics, Trade &

Development and Related Financing (either awarded a Doctorate or accepted
for award of Doctorate) from a university or equivalent academic institution
in India or abroad is a prerequisite for eligibility of Award. The Award will
be made to a person eligible to receive an award in Indian Rupees. Exim
Bank will accept, as entry, thesis by which doctorate has been obtained/
accepted for award of Doctorate between January 1, 2004 and September 30,
2008. Thesis can be submitted either in English or Hindi, and in the latter
case must be accompanied by a version in English.

Support to Indian Consultants for undertaking services abroad:-

Under an agreement with the International Finance Corporation (IFC),

Washington, Exim Bank is a participant in the trust funds set up by the IFC in
different parts of the world. As a result of this arrangement, Indian
consultants can avail of its support for undertaking specific assignment in
select countries. including Africa, Eastern Europe, CIS countries, China,
South Asia, and the Mekong Delta region.
RUPEE RESOURCES OF EXIM BANK

● Term Deposits:

Issued for tenors 1 to 5 years. Minimum size of each deposit is Rs. 10,000/-.
Applicable rates
On the deposits for different tenors is published from time to time. An incentive in
the form of a higher rate

is available to senior citizens. The deposits are non-transferable.

● Term Money:

Bank can borrow term money for 3-6 months from scheduled commercial banks
and cooperative

Banks at mutually agreed rates.

● Certificates of Deposit (CD)

Issued for tenors 1-3 years at mutually agreed rates in multiples of Rs 1 lakh with

minimum amount of a CD from a single subscriber at Rs. 1 lakh. Eligible investors

include individuals (other

than minors), corporations, companies, trusts, funds, associations etc. and non-
resident Indians (NRIs)

● Commercial Papers (CPs)

Issued at a discount to the face-value at mutually agreed rates, for maturities of

15 days - one year in denomination of Rs. 5 lakh (face-value) or multiples thereof.

Eligible investors

Include individuals, banking companies, other corporate bodies registered or

incorporated in India
And unincorporated bodies, Non- Resident Indians (NRIs) and Foreign
Institutional Investors (FIIs) (investment

By FIIs would be within the limit set for their investments by the Securities and
Exchange Board of India (SEBI)).

● Bonds

Issued for a minimum maturity of 3 years. In respect of bonds having call / put or
both options, the

same would not be exercisable before the expiry of one year from the date of issue
of bonds. The coupon on

the bond may be fixed or floating (linked to a mutually acceptable 'reference rate').

All the above instruments currently enjoy the highest safety rating from CRISIL,
ICRA and Fitch.

Distributors with proven track record can empanel with the Bank for arrangement
of term deposits.
Summary

The Exim Bank Letter of Credit policy can reduce a bank’s risks on confirmations
and negotiations of irrevocable letters of credit issued by overseas financial
institutions for the financing of U.S. exports.

This policy affords commercial and political coverage against the failure of an
overseas financial institution (issuing bank), whether sovereign or private, to make
payment or reimbursement to the insured bank on an irrevocable letter of credit.
Coverage is also provided for the insured bank's refinancing of payments under a
sight irrevocable letter of credit of the issuing bank.

What is covered?

The policy applies to irrevocable letters of credit which conform with the Uniform
Customs and Practice for Documentary Credits (UCP), 1993 revision, publication
number 500 of the International Chamber of Commerce where the insured has a
relationship with the foreign issuing bank. The policy is not applicable to
revocable, back-to-back, red clause or conditional letters of credit.

Coverage applies to irrevocable letter of credit sales for goods produced in and
shipped from the United States during the policy period, and for services

Performed by U.S. personnel either in the U.S. or in a host country. Receivables

for products, which are less than 50% U.S. content, excluding mark-up, and certain
defense products, are not eligible for cover.

Terms up to 180 days from the date of first presentation of documents may be
extended for consumer goods, spare parts and raw materials. On a case-by-case
basis, agricultural commodities, fertilizer and capital equipment may be insured on
terms up to 360 days.

Principal amounts are covered up to the maximum insured percentages stated

below or as specified in the policy declarations. Documented interest is covered up
to 180 days after the date of the issuing bank's default (or fewer days when the
claim is settled earlier). On letters of credit that are payable in U.S. dollars, the
insured interest rate is generally prime rate minus 0.5% or the rate stated in the
credit agreement, whichever is less. Exim Bank uses the prime rate published in
the Wall Street Journal, under the table "Money Rates."

The policy specifically excludes coverage for those transactions in which there is
an unresolved documentary dispute between the insured and the issuing bank.
Additionally, coverage is specifically excluded in situations in which the issuing
bank refuses documents at the time of presentation and seeks a refund from the
insured bank to which a reimbursement has already been made.

ELIGIBLE INSURED BANKS

The policy may be issued to any bank doing business in the United States in
accordance with applicable federal or state banking laws and regulations. An
application, form EIB92-34, is required. The insured bank must act under the terms
of the UCP as the paying, accepting, or negotiating bank for the insured
transaction.

PERCENTAGES OF COVER
The Bank Letter of Credit policy provides coverage against losses caused by
events such as war, revolution, expropriation or confiscation by a governmental
authority, cancellation of import or export licenses, and foreign exchange
inconvertibility, and commercial losses caused by events such as insolvency of the
foreign issuing bank, and failure to reimburse or to pay for other reasons.

Equalized coverage for commercial and political risks (comprehensive cover), or

political only coverage is available at the following maximum percentages

HOW THE POLICY WORKS

The policy affords coverage for eligible issuing banks in 2 ways:

1) As determined by Ex-Im Bank based on the insured's submission of an issuing

bank credit limit (IBCL) application, form EIB92-36, for the overseas financial
institution and issuance by Ex-I Bank of a written credit approval in form of a
policy endorsement. The application requires disclosure of all relevant financial
information on the issuing bank.

High credits may be extended up to the amount specified in the IBCL, which
generally remains valid for a maximum period of 12 months. Once issued, the
IBCL becomes a revolving credit approval limited only to the approved issuing
bank with specified terms and tenor.

Exim Bank has published its Short-Term Credit Standards (EIB99-09) - Buyers,
for Letter of Credit Transactions that may be consulted to determine the likelihood
of approval of the confirming bank and the issuing bank.
2) By use of a Discretionary Credit Limit (DCL) given to the insured bank. The
DCL requires the insured bank to have specified documentation of the issuing
bank’s creditworthiness, such as a short-term debt rating or minimum net worth
and profitability. Alternately, the insured bank may evidence satisfactory
experience with the issuing bank.

Under the DCL, political risks coverage is provided against those of the country of
the issuing bank’s head office. If the insured bank wants coverage against the
political risks of the country of the issuing bank, when different from the country
of the issuing bank’s head office, it must specifically apply for that cover (see
IBCL above).

The insured bank is required to obtain an Exporter Certificate, form EIB94-07,

certifying, among other things, that a letter of credit has been established in support
of the described transaction and that the goods are manufactured or produced in
and shipped from the United States. If the beneficiary of the letter of credit is an
entity other than the exporter, a Beneficiary Certificate, forms EIB92-37, is
required.

PRE-PRESENTATION AGREEMENT

Prior to the presentation of documents on the insured bank under a letter of credit
and at the time an insured bank commits to finance or pay, the insured may obtain
a pre-presentation agreement under which Ex-Im Bank agrees not to withdraw
coverage, add, delete, or amend any policy condition, credit limit or other
limitation, including the country limitation schedule for a period of up to 90 days.
The policy also sets forth a method by which this optional agreement may be used
and extended for additional time under the Discretionary Credit Limit.

WHAT THE INSURED AGREES TO DO

The insured agrees:

• To submit reports to Ex-Im Bank, form EIB92-30, listing appropriate bank

commitments and insured transactions, with payment of the corresponding
premiums (which will vary from month to month with the level of activity);
• To report all amounts past due (insured and uninsured), form EIB92-27,
from the foreign issuing bank;
• Not to enter into an insured transaction with an issuing bank that is 30 days
or more past due;
• To obtain Ex-Im bank’s prior written approval for rescheduling or
accelerating any insured transaction;
• To make written demands for payment on the foreign issuing bank within 30
days after default; To exercise reasonable care to minimize or prevent loss;
• To maintain evidence of the documents or experience used to exercise a
Discretionary Credit Limit

CLAIMS AND PAYMENTS

• Claims may be filed no earlier than 60 days and no later than 120 days after
the date of default. Prior to claim submission, the insured is required, within
30 days of default, to make written demand for payment on the issuing bank.
The insured is required to file a release and assignment form with Ex-Im
 Bank, transferring any rights to the defaulted receivables and any security
when the claim is paid, so that recovery may be attempted.

• Ex-Im Bank will pay claims within 60 days of receiving a satisfactorily

completed and documented proof of loss, form EIB92-39.

THE LAST WORDS

The journey, long with many hurdles along the way, but at every step was a
higher learning & a better understanding of why the Export Import Bank of
India is well established in the minds of many, today. While working on this
project I came to realize that the essence of Exim Bank lies with its ability
to recognize the changing global scenario and move ahead with the world,
by extending financial assistance to different countries in the form of loans,
advances, consultancy, rediscounting facilities, working capital finance,
project finance and not to mention its Lines of Credits facility. Because of
its range of differentiated and tailor-made products and services, the Bank
has been able to achieve international recognition & today it can be truly
called a catalyst for India’s international trade. With the advent of
globalization, the barriers to trade are getting dismantled & the dividing lines
between national & global markets are slowly disappearing. Towards facilitating
inclusive globalization is the banks new initiative, which has been seen through its
involvement in creating export capability in small & medium enterprises,
grassroots business enterprises & agro industries. Exim Bank recognizes that the
these sectors have great potential & with the right assistance, support, investment
& expertise, the purchasing power at the bottom of the pyramid can increase thus
leading to a gradual effect in all other sectors and thus the overall development of
the economy which was ultimately the aim of the Bank at the time of its
incorporation and still is.

Throughout the entire project we have referred to all the various functions and
duties that Exim bank has undertaken in all these years. This project has
mainly put light on Exim bank of India.Exim bank of India has grown
exceptionally well in all those years and catered to the needs of all those
thousands and millions of people in their export and import regulations. It is
the backbone of Indians foreign trade and today that India’s foreign trade is
touching heights, Exim bank has played the major role in fulfilling that
expectation.

It is now India’s one of the largest financial institution and is acclaimed

worldwide for all the functions it carries out. It has been graded A+ + + by
CRISIL.it has taken various functions apart from export and import duties.
Lastly we can say that it is not just a bank, but an enormous financial
institution, which is leaving no stone unturned in making its mark globally.

EXECUTIVE SUMMARY
 Exim bank is a sole government organization authorized to carry on all the
functions, duties and regulations relating to the export and import of all the various
goods and services. Today Exim bank is not only an import and export bank, but it
has grown over the years and as the time passed it now stands as a large financial
institution which has adopted all the basic requirements and has gained enormous
fame and has made a mark in the entire globe. Established in 1982,with the
objective of promoting India’s international trade and to function as the principal
financial institution for co-coordinating the working of institutions engaged in
financing imports and exports of goods and service.

Exim banks mission is to facilitate globalization of Indian business. Today India

has emerged as a developing country and has faced many challenges and hurdles
and has successfully overcome the tag of underdeveloped to developing and is
soon going to be felicitated with the tag of developing country. With large
infrastructure of various projects lined up and the industrial sector which has
attained a boom in the recent past has led India to climb another milestone and
Exim bank is one of the tools to develop India’s foreign trade. This has played a
major role in supporting India for becoming one of the successful countries in the
world.

Today Exim bank has emerged as a huge financial institution in the world, which
has not only undertaken import and export duties but is also catering to the various
needs of other sectors of the industry.
Books:

• Banking Theory and Practice by Sundaram and Varshney.

• Practice and law of Banking by B.S. Khubchandani.
• Export Import Financing by Gerhard.W.Scheider

Publications:

• Export-Import Act of India 1981

• News letters- Eximius, June 2008, March 2008.
• Annual Report 2007-2008 – Exim Bank.
• Brochure- Exim Bank Of India
• Economic Times
• Hindu Business Line
• DNA
WEB SITES:

 www.rbi.org.in
 www.eximbankindia.com
 www.commerce.nic.in
 www.eximbankagro.com
 www.eximcomm.com