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Centre approves Rs 6,000 crore capital infusion in Exim Bank
The government on Wednesday approved a capital infusion of Rs 6,000 crore in state-owned Exim Bank to expand its business. The Union Cabinet, chaired by Prime Minister Narendra Modi, also approved an increase in the bank’s authorised capital from Rs 10,000 crore to Rs 20,000 crore.
By
migrator
migrator
New Delhi
Briefing reporters about the decisions, Railway Minister Piyush Goyal said it has been decided to issue recapitalisation bonds by the Government of India to the tune of Rs 6,000 crore for capital infusion in Export-Import Bank of India (Exim Bank).
“The equity will be infused in two tranches of Rs 4,500 crore in 2018-19 and Rs 1,500 crore in 2019-20 respectively,” he said.
The recapitalisation bonds will be on the lines of those issued to public sector banks, he said, adding that the infusion of capital into Exim Bank would enable it to augment capital adequacy and support Indian exports with enhanced ability.
Exim Bank is the principal export credit agency in India and the infusion will give an impetus to new initiatives such as supporting Indian textile industries, likely changes in the Concessional Finance Scheme, likelihood of new letters of credit in future in view of the country’s active foreign policy and strategic intent, he added.
Established by the Government of India in 1982, Exim Bank is the apex financial institution for financing, facilitating and promoting the country’s international trade.
The bank primarily lends for exports from India including supporting overseas buyers and Indian suppliers for export of developmental and infrastructure projects, equipment, goods and services from India.
Trade deficit at 10-month low
The country’s exports growth remained almost flat at $ 27.93 bn in December 2018, mainly on account of global trade tensions. As per trade data released by the commerce ministry, exports grew at the slowest pace in three months at 0.34 per cent in December, while imports entered negative zone, registering a decline of 2.44 per cent to $ 41 billion. Declining imports have narrowed the trade deficit to ten-month low of $ 13.08 billion in December 2018 as against $ 14.2 billion in the same month previous year. Last time, imports had plunged into negative territory in September 2016. It was dipped by 2.54 per cent then. The import of gold too contracted by 24.33 per cent to $ 2.56 billion in December 2018. During the month under review, several key export sectors recorded negative growth. It includes engineering goods and tea and coffee.
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