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  EXIM Bank Finance back
EXIM Bank extends Lines of Credit (LOCs) to overseas governments, financial institutions, regional banks and other overseas entities, to finance India's exports to those countries. EXIM Bank's LOC is a risk-free, non-recourse export financing option available to Indian exporters for promoting their exports. Under this arrangement, overseas importers are required to pay advance payment to Indian exporters, which is usually 10% of the contract value. EXIM Bank pays the balance amount, which is normally 90% of the contract value, to Indian exporters through negotiating banks in India, upon shipment of goods. EXIM Bank also operates LOCs, announced by the Government of India, to the country's trading partners.
Forms of Financial Assistance Provided by EXIM Bank to Indian Exporters :
1. Delayed Payment Exports - Term loans are provided to those exporters who deal with exporting of goods and services and this enables them to offer delayed credit to the foreign buyers. This system of deferred credit covers Indian consultancies, technology and other services. Commercial banks take part in this program either directly or under risk syndication arrangements.
2. Pre-shipment credit - Indian companies which are highly involved in the execution of export activities beyond the cycle time of six months are funded by EXIM Bank. The construction or turnkey project exporters enjoy the provision of rupee mobilization.
3. Term loans for export production - EXIM Bank offers term loans to the 100 percent export oriented units, units involved in free trade zones, and exporters of various soft ware’s in India. EXIM bank also works in association with International Finance Corporation, Washington, to provide financial assistance to the small scale and medium industrial units in terms of ameliorating the export production capacity of these units in India. EXIM Bank also provides funded and non- funded facilities to deemed exports from India.
4. Foreign Investment Finance - EXIM bank provides financial assistance for equity contribution to the Indian companies who form Joint Venture with the foreign companies.
5. Financing export marketing - It helps the exporters carry out their export market development plan in Indian market.
Export Credit Insurance-Export Finance :
Eligibility : Any bank authorized to deal in foreign exchange can obtain the Export Finance Cover in respect of its exporter-client who has been classified as a standard asset and whose CR is acceptable to ECGC.
Period Of Cover : 12 months
Eligible Advances : Advances against incentives such as cash assistance, duty drawback, etc., receivable at post-shipment stage.
Protection Offered : Against losses that may be incurred in extending post-shipment advances against incentives due to protracted default or insolvency of the exporter-client.
Percentage of Cover : 75%
Premium : 6 paise per Rs.100 p.m. on the highest amount outstanding on any day during the month.
Maximum Liability : 75% of the post-shipment limit sanctioned to the account.
Important Obligations Of The Bank : Monthly declaration of advances granted and payment of premium before 10th of succeeding month. Approval of the Corporation for extension of due date beyond 360 days from due date to be obtained. Default to be reported within 4 months from due date or extended due date of advances, if not recovered, filing of claim within 6 months of the Report of Default. Recovery action after payment of claim and the subsequent sharing of recovery.
Highlights : Banks can take the cover selectively. Banks having ECIB-WTPS are eligible for concessionary premium rate and higher percentage of cover as applicable.