INTRODUCTIO N 1.

The Export-Import Bank of India (Exim Bank) is a public sector financial institution created by an Act of Parliament, the Export-import Bank of India Act,1981.2. The business of Exim Bank is to finance Indian exports that lead to continuity of foreign exchange for India.3. The Bank's primary objective is to develop commercially viable relationships with a target set of externally oriented companies by offering them a comprehensive range of products and services, aimed at enhancing their internationalization efforts.4. There are apex institutions in the country, which deal with major economic activities, viz. industry, agriculture and foreign trade.5. The Industrial Development Bank of India extends term industrial loans; the National Bank for Agricultural loans; and the Exim Bank extends term loans for foreign trade.6. All these institutions are wholesale banks. They, therefore work closely with commercial banks and other state level financial institutions that operate there tail banking system in the country. O B J E C T I V E S O F E X I M BANK The Export-Import Bank of India was established for providing financialassistance to exporters and importers for functioning as the principle institutionfor co-ordinating the working of institutions engaged in financing export andimport of goods and services with a view to promoting the countrysinternational trade:The Export-Import Bank of India Act, 1981

ACT

Completed 23 years of operations in March 2005 Set up by an Act of Parliament in September 1981 Commenced operations in March 1982 Wholly owned by the Government of India Export-Import Bank of India was set up for the purpose of financing,

facilitating and promoting foreign trade in IndiaExim is the principal financial institution in the country for co-ordinating working of institutions engaged in financing exports and imports G E N E R A L G U I D E L I N E S O N EXIM L I N E S O F C R E D I T (LOCS) Introduction : Exim Bank extends Lines of Credit (LOCs) to overseas financial institutions,regional development banks, sovereign governments and other entitiesoverseas, to enable buyers in those countries, to import goods and services fromIndia 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 modeof non-recourse financing option to Indian exporters, especially to SMEs, andserves as an effective market entry tool. How does it work? 1. Exim Bank signs LOC Agreement with overseas Borrower Institutions(Borrower) and announces the availability of LOC for utilization, when theAgreement becomes effective.2. Exporter checks with Exim Bank, available amount under the LOC andquantum of service fee payable to Exim Bank and negotiates contract withImporter.3. Importer approaches the Borrower for approval of the contract

4. Borrower appraises the proposal. If satisfied, approves the contract andrefers to Exim Bank for concurrence for inclusion of contract for being financedunder the LOC.5. Exim Bank accords approval to the contract, if in conformity with theterms of LOC. Exim Bank conveys contract approval to the exporter and theBorrower.6. The Importer arranges remittance of advance payment to the Exporter andalso 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.7. Exporter executes the contract/ships the goods/provides

services.8. Commercial bank in India, designated as the Negotiating Bank, negotiatesshipping documents and pays the exporter.9. Exim Bank reimburses the Negotiating Bank, on receipt of valid claim andservice fee, by debit to the LOC account of the Borrower.10. Borrower repays Exim Bank on due dates. 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. General Exporters are advised to check with Exim Bank before finalizing the contracts with the buyers, details of service fee and other charges, if any, payable by the exporters on the contracts to be covered under the relative LOC. GeneralVerification : Exporters are advised to check with Exim Bank before finalizing the contractswith the buyers, details of service fee and other charges, if any, payable by theexporters on the contracts to be covered under the relative LOC. Export Credit: Exim Bank provides pre shipment and post shipment credit in Indianrupees and foreign currency. Finance is extended for short term i.e. upto 6months as also for medium/long term i.e. beyond 6 months for eligible productsand projects. Certain RBI guidelines apply for such medium/long term exportcredit. Hammocks made out of cork and cotton ropes Finance for Export Oriented Companies Exim Bank offers loans for financing Export Oriented Companieswhich may be categorized as under: Project Finance Finance for new projects, expansion, modernization projects. Finance for purchase of equipment both imported as well as indigenous. Working Capital both short term as well as medium term. Overseas Investment Finance

 Export Marketing Finance (Finance for developing strategic forwardlinkages) : Term loans are extended to important strategic marketing plan coveringinter-alia, overseas market research, participating in international trade fairs, promotion of product, brand positioning, international quality certification, mirror product adaptation, pre-operative expenses for overseas offices, prospective buyersvisits to India, etc. Export Product Development: Term Loan for product adaptation, pilot plants, product/processdevelopment, etc. Finance for Research & Development: Exim Bank also provides lending for Research & Development activitiesfor facilitating exports. Advisory Services: Exim Bank offers advisory services to Indian exporters for facilitatingforward linkage for agri exports. Exim Bank's international network comprising overseas office, co-operation partners, correspondent banks and financialinstitutions is leveraged to provide export information on:Overseas markets/market segments. Direct marketing of product. Overseas business opportunities. Information on export/import regulations, finance, etc.