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EXIM Bank of India: functions and exam facts
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EXIM Bank is the Export-Import Bank of India, the apex financial institution that finances, facilitates and promotes India's foreign trade. It was established on 1 January 1982 under the Export-Import Bank of India Act, 1981, as a statutory corporation wholly owned by the Government of India. Its head office is in Mumbai, and it has offices in India and abroad.
What EXIM Bank does
- Export credit. Loans to Indian exporters before and after shipment, so they can produce and sell abroad.
- Import finance. Funding for imports of capital goods and other items that support exports.
- Overseas investment finance. Loans to Indian companies setting up joint ventures and projects abroad.
- Lines of credit. EXIM Bank extends credit lines to foreign governments, banks and institutions so that buyers abroad can import Indian goods and services. Many are supported by the Government of India as a tool of development partnership.
- Advisory and information services for exporters.
How it differs from other institutions
| Institution | Main focus |
|---|---|
| EXIM Bank | Foreign trade and overseas investment |
| NABARD | Agriculture and rural development |
| SIDBI | MSMEs |
All three are All India Financial Institutions regulated by the RBI. The Export Credit Guarantee Corporation (ECGC) is a separate entity that insures exporters against payment risk, so do not mix the two up.
Example
An Indian firm in Tiruppur with orders from Europe needs money to buy yarn and fabric before it ships. Its bank can give pre-shipment credit, and EXIM Bank supports exporters through programmes for credit and for building export capacity. If an Indian company wants to open a plant in Africa, EXIM Bank can finance part of that overseas investment.
How bank exams ask about it
Common stems: "EXIM Bank was set up in", "the apex institution for foreign trade finance", "head office of EXIM Bank", and "which of the following is an AIFI". RBI Grade B's finance and management syllabus lists EXIM Bank as part of the financial system, so those aspirants also need its functions. Keep a table of all AIFIs in your banking awareness notes, and see the RBI Grade B guide.
Where to check
eximbankindia.in lists current programmes and credit lines, and the Ministry of Commerce publishes trade policy.
Frequently asked questions
Does EXIM Bank accept deposits from the public?
No. It raises funds mainly by issuing bonds and borrowing from markets and institutions.
Is EXIM Bank the same as ECGC?
No. EXIM Bank provides finance. ECGC provides insurance against non-payment by foreign buyers.
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