Exim Bank structuring new product with ECGC

Exim Bank, which provides finance facilities to exporters and importers, is collaborating with Export Credit Guarantee Corporation for structuring new credit tools where government or multilateral lines of credit are not available, an official of the bank said today.

"We are working towards putting in place a partially structured buyer's credit where exporters will bear the subsidy. Here, ECGC will grant the political risk," Exim Bank chairman and managing director TCA Ranganathan told reporters here today.

Ranganathan said that this new tool could be ascribed as the choice of third best after multilateral funding and government line of credit.

He said that an announcement in this regard would be made in six to eight weeks.

In case of government line of credit, the interest cost differential was being borne by the government.

Ranganathan said that such partially structured buyer's credit was being already used by the Chinese Exim Bank.

Asked whether the bank was looking towards furthercapital infusion from the government, which owns it fully, Ranganathan said that the capital adequacy ratio as on March 2010 stood at 18 per cent.

With a lending growth target of 20 per cent for 2010-11, Ranganathan said that such calculations were normally done during the third quarter.

He told at the Ficci Banking Conclave here that the bank was looking towards promoting trade in the east Asian countries, particularly with those India was having trade treaties.

Recently, Exim Bank opened a one billion $ line of credit for Bangladesh.

Ranganathan said that Exim Bank was now working on providing similar lines of credit for Myanmar.

He said that Exim Bank would provide finance to company's R&D initiatives depending upon the performance.

Exim Bank was also having a European Investment Bank (EIB) line of credit for promoting clean energy.