Role of EXIM Bank | EXIM Bank(Objectives, Features &Functions)
Introduction
The Export and Import Bank of India, popularly known as the EXIM Bank was set up in 1982. It is the principal financial institution in India for foreign and international trade. It was previously a branch of the IDBI, but as the foreign trade sector grew, it was made into an independent body.
The main function of the Export and Import Bank of India is to provide financial and other assistance to importers and exporters of the country. And it oversees and coordinates the working of other institutions that work in the import-export sector. The ultimate aim is to promote foreign trade activities in the country.
Objectives
- To ensure and integrated and coordinated approach in solving the allied problems encountered by exporters in India.
- To pay specific attention to the exports of capital goods.
- Export projection.
- To facilitate and encourage joint ventures and export of technical services and international and merchant banking.
- To extend buyers’ credit and lines of credit
- To tap domestic and foreign markets for resources for undertaking development and financial activities in the export sector.
Functions
Main functions of Export and Import Bank of India bank:
- Finances import and export of goods and services from India
- It also finances the import and export of goods and services from countries other than India.
- It finances the import or export of machines and machinery on lease or hires purchase basis as well.
- Provides refinancing services to banks and other financial institutes for their financing of foreign trade
- EXIM bank will also provide financial assistance to businesses joining a joint venture in a foreign country.
- The bank also provides technical and other assistance to importers and exporters. Depending n the country of origin there are a lot of processes and procedures involved in the import-export of goods. The EXIM bank will provide guidance and assistance in administrative matters as well.
- Undertakes functions of a merchant bank for the importer or exporter in transactions of foreign trade.
- Will also underwrite shares/debentures/stocks/bonds of companies engaged in foreign trade.
- Will offer short-term loans or lines of credit to foreign banks and governments.
- EXIM bank can also provide business advisory services and expert knowledge to Indian exporters in respect of multi-funded projects in foreign countries
Features/Importance/ Significance of EXIM Bank
The features of EXIM Bank are as follows.
- Other than providing financial assistance, the Export and Import Bank of India bank is always looking for ways to promote the foreign trade sector in India. In the early 1990s, EXIM introduced a program in India known as the Clusters of Excellence.
- The aim was to improve the quality standards of our imports and exports. It also has a tie-up with the European Bank for Reconstruction and Development. It has agreed to co-finance programs with them in eastern Europe.
- In order to promote exports EXIM bank also has schemes such as production equipment finance program, export marketing finance, vendor development finance, etc.
- It also has a tie-up with the European Bank for Reconstruction and Development. It has agreed to co-finance programs with them in eastern Europe.
Conclusion
EXIM Bank, founded in 1982, is a bank that ensures the financial terms and assets related to international or foreign trade export and import. It gives exporters and importers credit and allows for safe and secure trade. It also established policies and procedures for Indian import and export. It enables people to conduct secure business in foreign countries.