. Which are the key areas of the bank's lending presently?
Exim Bank facilitates two-way technology transfer by financing import of technology and investments abroad by Indian companies for setting up joint ventures or subsidiaries.
The main sectors in which Exim Bank has a sizeable exposure as on March 31, 2007, are highly export-intensive ones such as textiles/garment (12 per cent), engineering goods and construction (9 per cent each), metals and metal processing and chemicals and dyes (7 per cent each) and drugs and pharmaceuticals (6 per cent).
What has been the business growth for Exim Bank last year? Has credit facility increased?
During FY07, the bank's loan approvals were Rs 26,800 crore, an increase of 31 per cent over the previous year, while disbursements rose 47 per cent to Rs 22,100 crore. Loan assets increased 29 per cent to Rs 23,300 crore as on March 31, 2007. Profit after tax increased 11 per cent to Rs 300 crore in 2006-07.
In recent times, the bank has been pressing Indian exporters to take up projects abroad. What was the response?
Quite good. Exim Bank provides a range of funded and non-funded facilities, by way of guarantees, to support to such project exports. Financing is provided both in foreign currency and Indian rupees.
Currently, 184 project export contracts valued at nearly $11.1 billion are under execution in 35 countries by 41 Indian companies with Exim Bank's support. Middle East and North Africa account for almost three-quarters of these contracts (by value).
What kind of opportunities do you see in the healthcare and medical tourism industry and what will be the challenges?
We noticed that several features have positioned India as a ideal healthcare destination viz., low-cost healthcare solutions, availability of skilled healthcare professionals, reputation for treatment in advanced healthcare segments.
This has increased the popularity of India's traditional wellness systems, and strengths in information technology. Our estimates show about 500,000 international healthcare visitors (including NRIs) visited India in 2006. Estimated revenue generation out of healthcare tourism was about Rs 2,400 crore, or over $600 million, in 2006.
What kind of approach would you adopt in rural markets?
We are helping to push for exports from hitherto untapped areas. We have already started tapping potential in rural India and help establish direct contact between overseas buyers and potential exporters in the handicrafts and horticulture sectors.
Now, we are trying to help export locally developed rural technology to developing countries.
What kind of a financing model will work in the rural areas?
It is essential to work on a microfinancing model. There are quite a few good microfinancing institutions that are currently in operation in the country. The success of the Grameen Bank in Bangladesh is a good model in terms of empowering the poor through rural banking.
Rapid appreciation of the rupee against the dollar has seriously affected Indian exporters. There are demands from manufacturers for removal of fringe benefit tax (FBT) on sales promotion expenses, especially on their foreign tours, board and lodging. What is your take on this?
The appreciating rupee has affected certain labour-intensive sectors like textiles, leather, handicrafts, and sports goods. Their profitability has also eroded. Against this background and in light of the fact that the government would not want to export tax but only the value addition on a particular product, this appears to be a reasonable demand by the exporters under the current circumstances. This is reinforced by the fact that most of the taxes are anyway reimbursed to exporters.
What is the agenda that you have set yourself for the next 3 years?
We at Exim Bank believe that international trade will be the pivot,on which the future of the Indian economy will hinge in the foreseeable future. We are constantly endeavouring to widen our product basket.
Our forays into financing of the entertainment industry and the healthcare services sector, both of which offer huge export potential, are some initiatives in this direction.
Further, today India has emerged as an important global investor with overseas direct investment outflows amounting to more than $10 billion. We expect to play a proactive role in supporting such globalisation of Indian companies and view it as a major growth driver of our business.
With SMEs and agro-exports being focus groups, Exim Bank's Lines of Credit extended to commercial and regional development banks overseas will increasingly serve as a market entry mechanism for Indian SME exporters; and play an important role in providing impetus to our topline and bottomline.
