Globalization and liberalization were initiated in India after the 1991 reform. The government has opened gates for the import and export industry. And after that, this industry rose from scratch and became one of the largest exporter countries globally in no time.
The Export Import Bank in India, vastly known as the EXIM bank, is one of the prominent financial in India providing financial assistance to the Importer and exporters of India through various services.
Previously, it was considered the branch of IDBI However, as the economy and industry grew; it gained its own identity. If we look at the core functions of EXIM Bank, there would be numerous, but its ultimate objective is to cater to the requirements of Indian importers and Exporters and promote foreign trade in the country. But, if you are planning to dig deeper into this one of the largest trade networks in India, you can find numerous vital functions that you should be aware of.
This blog will also help you understand how EXIM Bank can facilitate foreign trade, whether you are a growing Indian business entity, joint venture, or even a small financial institution.
However, before getting into the main functions of this robust entity, we need to understand why Export Import Bank in India is considered one of the dominant institutions in financial trade nationally and internationally? And how it can assist you when it comes to the financial matters engaged in the import-export trade.
Let’s get started with our journey with a brief introduction to EXIM bank of India and move ahead with its principal functions.
The Importance of Export Import bank in India
Apart from assisting other entities financially, EXIM banks significantly work as a monitoring body that coordinates the action plan for other entities working in the respective industry in India. The management is run by a board led by the managing director, followed by other 17 directors representing various domains. And the main ruling party, the central bank, has subscribed to the whole paid-up exclusively and runs the institutions single-handedly.
The main objective of this financial institution is to bring excellence and increase the bar of quality in the industry of Import-export.
For this matter, EXIM Bank has also tied up with the European Bank of Reconstruction and Development in order to reach the Eastern Europe region by co-financing the programs funded by EBRD-related Import-export. Even in India, to promote foreign trade, they have also initiated schemes like Vender development finance, Production equipment program, marketing finance for export, and many more to boost the industry significantly.
If we dig deeper and talk about the financial products, EXIM Bank provides mainly four financial products to the foreign trade businesses and government institutions,
- Corporate Banking
To increase the competitiveness of home-grown companies, the Export Import bank in India offers numerous financial programs in order to provide financial support through its corporate banking facilities.
- Buyers Credit
Basically, with this facility, any international buyer can open a letter of credit in favour of any Indian exporter. Under deferred payment, they can import any goods or services from Indian exporters without any hurdles or complications.
- Finance to the Overseas Investments
The overseas Investment Finance program is ideally reformed for those Indian companies interested in joining ventures in any foreign country. And support them by extending long-term loans to enhance the possibilities of export business opportunities.
- Lines of Credit
The Indian exporters can explore the international regions and enter into the existing markets with the freedom over the risk of payments through the advance benefits of Line of credit.
Now, this was just the brief introduction of its financial products. Let’s move forward and go through the principal functionalities of EXIM Bank of India to get a 360-degree view of how this predominant financial institution works in India.
- The first and core function of EXIM of India is to address India’s Import and Export Industry requirements.
- The institution finances the various types of export-import machinery for lease and hires purposes as well.
- Financing the goods and services imported from other countries than India.
- With the purpose of foreign trade, EXIM refinances financial transactions of the banks and other financial institutions.
- In addition to financial institutions and banks also assist the newbie business and joint venture businesses in foreign countries that want to grow in this particular industry.
- Besides the financial assistance, EXIM banks also offer professional technical guidance to the administrative matters connected to the import-export community.
- The companies engaged to the foreign trade EXIM Bank as an underwriter of the stocks, shares, and debentures.
- Apart from underwriting, it also provides short-term credit loans to the companies engaged with foreign trades.
- Apart from all the services, EXIM Bank is considered a trusted institution for offering rational business advisory services to the Indian Importers for multiple projects.
- EXIM bank monitors the trades happening in the domestic region and across the international borders and analyses how it can impact the Indian economy.
Apart from the functions mentioned above, EXIM banks also can raise money from the central government, RBI, and the market through the issue of debentures and bonds. Moreover, it also offers financial facilities to the financial institutions and banks against their financial services.
To conclude, this was just a helicopter view of the core functions of the Export Import Bank in India and its role in the Indian business world that engages with international trading. To get in-depth details about the key responsibilities of EXIM Bank and to explore more concepts regarding the Import-export industry get expert consultation from a trustworthy resource.
Reach out to impexperts to explore the vast number of possibilities in the Import-export industry and get a one-stop solution for any query regarding Import-export services and open the doors for thousands of global opportunities waiting just for you!