Exim Bank to focus on guarantee biz for improved balance sheet

Aimed at boosting overall lending portfolio, Export-Import Bank of India (Exim) is looking to focus more on its guarantee business that currently stands at 10 per cent of the book.
Under the guarantee business, the bank provides Indian companies facilities to secure and facilitate execution of export contracts.
"Currently, we are doing actual lending, but we want to move more into guarantee business. For example, the US Exim Bank is 90 per cent guarantee and only 10 per cent is the actual lending. We want to move in that direction because there we have a different headroom (to grow our overall balance sheet)," Exim Bank's chairman and managing director Yaduvendra Mathur told reporters here today.

The bank's guarantee business portfolio at present is around Rs 11,000 crore, which is 10 per cent of its overall balance sheet.
Through the disbursal route, the bank can lend up to 10 per cent of its net owned fund which limits its ability to grow the balance sheet.
"When I give guarantees then it impacts the capital adequacy ratio (CAR) and it does not affect cash outflows. I get more headroom for expanding my balance sheet under the guarantee route and not under the disbursement route. Overall balance sheet will go up by using my guarantees," Mathur added.

The bank's capital adequacy ratio stands at 15 per cent as against the regulatory requirement of 9 per cent, which provides more opportunity to grow portfolio.

Mathur said Exim Bank has sought Rs 1,700 crore capital infusion from the government for the next financial year.
"From the last two financial years (FY15 and FY16) our equity has been growing by Rs 1,300 crore each, which means we could lend Rs 13,000 crore every year. We have asked for Rs 1,700 crore (from the government) for 2016-17," he said.
Under the Exim Bank Act, which was amended in 2011, the authorised capital of the bank should be Rs 10,000 crore or such amount that government may decide, and the bank has asked the government to increase its paid-up capital, he said.

The bank is also planning to raise over USD 1 billion of
funds through bond market in next few months.
"We are looking at a big issue, which will be in excess of USD 1 billion in the next couple of months for some of the big infrastructure projects that are now coming up," Mathur said.
So far in this fiscal, Exim Bank has raised USD 500 million through green bond and another USD 500 million through a dollar denominated bond.
The bank, in association with the government and industry associations like CII, Ficci and Assocham, today organised an interactive session for Indian exporters on the government new Indian Development and Economic Assistance Scheme (IDEAS) Guidelines for Lines of Credit (LOCs) to overseas governments.

The session focused on disseminating the changes in the operational and procedural aspects.
Exim Bank has so far extended 200 LOCs in 62 countries with credit commitments aggregating USD 12.48 billion and 26 LOCs aggregating USD 4.41 billion in pipeline.