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EXIM BANK FULL FORM
Exim bank’s full form is Export-Import Bank of any country. The Exim Bank of a country coordinates extensively with international trade stakeholders to ensure that exporters have a pleasant trade experience. An EXIM Bank’s role includes making foreign trade finance easier, as well as trade norms and conditions.
WHAT IS AN EXIM (EXPORT-IMPORT) BANK?
Government or semi-government institutions that guarantee the security and prosperity of the foreign trade of a country are known as Export-Import Banks (Exim Banks). They offer tailored financial arrangements to protect the exporters’ interests from importer default, non-payment and such issues.
Exim banks specialise in international trade and do not engage in intra-country activities. They collaborate closely with government departments, international logistics businesses, and customs to guarantee that central export guidelines are enacted and that the interests of those involved in the trade are protected.
Although foreign trade requires input from the exporter, logistics supplier, and customs on the exporter’s end, and a matching array of stakeholders on the importer’s end, it remains critical to collaborate not just with domestic authorities, but also with international peers.
EXIM BANK OF INDIA
The Exim Bank of India was formed by the Indian Government following the Export-Import Bank of India Act of 1981. It is India’s largest and most influential export finance agency, focusing on connecting foreign trade and investment with domestic economic progress.
The Exim Bank of India acts as a growth engine and provides a great array of goods and services to help industries and SMEs flourish. This comprises technology imports and export product development, as well as export manufacturing, export commercialization, pre-and post-shipment logistics, and international investment.
It provides Lines of Credit (LOCs) to foreign financial establishments, regional growth banks, sovereign government bodies, and other organisations, allowing consumers of other nations to import growth and infrastructure projects, materials, goods and services from India on deferred credit payments.
The EXIM Bank is the Indian government’s entirely owned subsidiary. It is headquartered in Mumbai, Maharashtra, and Ms Harsha Bangari is the present Managing Director. EXIM Bank’s subsidiaries comprise the Export-Import Bank of India, the Asset Management Arm, and the Export-Import Bank of India London Division.
OBJECTIVES OF THE EXIM BANK OF INDIA
The following are the objectives of the Exim Bank of India.
Delivering monetary support to importers and exporters, as well as serving as the banking agency in charge of integrating the efforts of institutions that finance the import and export of products and services to boost India’s global trade.
The EXIM Bank of India has been tasked with operating on business fundamentals while keeping the public interest in mind.
The EXIM bank’s strategy has shifted from a product-centric approach with Export Capability Creation and Export Credits towards a stronger customer-centric one with a broad range of goods and services to enable enterprises at all phases of their operations.
With a broad range of goods and services focused on strengthening its internationalisation initiatives, the bank hopes to create economically friendly partnerships with a target group of globally inclined enterprises.
It aspires to make a significant impact on the existence of Indian enterprises with international ambitions by using its leadership and competence in export finance.
The bank also seeks to make it easier for Indian enterprises to go global.
WHAT IS THE IMPORTANCE OF THE EXIM BANK OF INDIA?
The EXIM Bank of India is mainly accountable for aiding India’s exporters and importers with financial support. It also monitors and manages the activities of other entities involved in the export-import sector. It has established programs like the production equipment finance programme, vendor development funding, export marketing finance, and so on, in an attempt to encourage exports.
In addition, the EXIM Bank works to develop India’s overseas trade industry. The Bank established Clusters of Excellence in the nation in the early 1990s. Its goal was to raise standards of quality for both exports and imports. The EXIM Bank has a partnership with the European Bank for Reconstruction and Development for this purpose.
FUNCTIONS OF THE EXIM BANK OF INDIA
The EXIM Bank’s main functions are as follows:
Funding exports and imports of commodities and services from India.
Import and export of commodities and services to foreign countries are also financed.
Underwriting shares, stocks, debentures, and bonds issued by corporations that engage in international trade.
It funds the export-import of capital equipment and heavy machinery on a lease or hires purchase arrangement.
Performing commercial bank functions for an importer or exporter in international trade transactions.
Supplying banks and other monetary entities with refinancing services for their international trade capital needs.
Offering overseas banks and governments short-term loans or lines of credit (LOC).
WHAT THE EXIM BANK OFFERS
These are some products of the Exim Bank of India –
Credit for consumers: With such a credit arrangement, a foreign purchaser can obtain a “letter of credit” in the favour of an Indian exporter and purchase products and services on a deferred transaction basis from India.
Corporate Banking: The EXIM Bank provides a variety of funding programmes to help Indian businesses improve their export competitiveness. It also helps in their working capital and oversees their investment needs.
Lines of Credit: Lines of Credit (LOC) allow Indian exporters to extend their operations in existing marketplaces or explore new territories without risking payment from foreign buyers.
Overseas Investment Finance: The EXIM Bank provides term loans to Indian corporations for equity investments in foreign joint operations, intending to increase export markets.
CONCLUSION
The EXIM Bank is critical in supporting Indian enterprises in conducting trade abroad and growing their businesses. EXIM Bank provides exporters with a vast scope of consulting and research services to help them maximise export possibilities, boost competitiveness, and assess global risks. As a result, it is an important part of the Indian economy.
