Exim Bank seeks equity infusion to be enhanced to Rs 1,300 cr

The bank has received about Rs 500 cr as equity from govt so far

Export Import (Exim) Bank has sought an equity infusion of Rs 1,300 crore from the government in the current financial year. So far, the bank has received about Rs 500 crore as equity from the government.

Last year, Exim Bank disbursed about Rs 50,000 crore, clocking a growth of around 18 per cent. This year, the growth could be muted due to equity constraints and the new guidelines of the India Development Economic Assistance Scheme, which as released in 2015, said Yaduvendra Mathur, chairman and managing director, Exim Bank, on the sidelines of The Federation of Indian Chambers of Commerce and Industry (FICCI) Banking conclave here today.

"'Our disbursements might be same as last year. Last year, for overseas disbursement in projects under line of credit, the new rules came. We found a lot of complains by foreign countries, some private companies were getting more contracts, so we have made that more transparent. The new guidelines under India Development Economic Assistance Scheme has made the process more transparent, " he said.

"There will be challenges this year. We are requesting the government to inject more equity. We got only Rs 500 crore. We are requested finance ministry to enhance the equity to Rs 1300 crore, " he added.

This apart, the bank is working on a $10 billion line of credit to Africa, he said. Last year, the bank had financed around Rs 5264 crore to 26 overseas ventures under the Overseas Investment Finance scheme.

"Under Make in India we are encouraging companies to acquire brands and companies outside India. The global slippages in many countries are opportunities for Indian companies," said Mathur.

Like last financial year, Exim Bank could raise close to $2-3 billion through dollar bonds this year too, said Mathur. Last year, the first time the bank raised $500 million green bond through Green Bonds.

Exim Bank is also looking for innovative funding mechanism of ships for overseas trade through collaboration with Shipping Corporation of India.

"We are working with other partners if we can fund ships through innovative financing. Of the total overseas trade of India, only 5 per cent are carried by ships owned by India. We are looking to work with SCI, it can take as charter, and ship can be bought by an investor," said Mathur.

Rampal Coal Project may poise reputation risk

On the The Rampal coal power plant in Bangladesh, which has faced opposition on account of unviability due to ecological and economic returns, Mathur said, the project funding was backed by sovereign guarantee of Bangladesh, and counter-guaranteed by the Indian government. The bank has an exposure of about $1.5 million in the project.

"We are backed by sovereign guarantee of Bangladesh, and we have government of India counter guarantee. Howevver, we might take a reputation risk," said Mathur.

Recently, The Institute for Energy Economics and Financial Analysis (IEEFA) had said electricity produced from the project would cost 32 per cent more than the average electricity in Bangladesh.