EXIM Bank expects foreign currency borrowings to be $3-3.5 bn in FY24

Rupee-denominated fund-raising would be worth Rs 20,000-25,000 crore in FY24, says export finance institution

Export Import Bank of India (EXIM) expects to mobilise foreign currency resources worth $3-3.5 billion in FY24 to support business, especially long-term export credit.

Harsha Bangari, managing director of the state-run export finance institution, said rupee-denominated fund-raising would be worth Rs 20,000-25,000 crore in FY24.

The scale of fund-raising this financial year ending March 31, in foreign currency and the domestic market, is similar to estimates for FY24.

EXIM’s cost of raising funds has gone up as a consequence of interest rates increasing in domestic and global markets.

Bangari said on the sidelines of the G-20 trade finance summit in Mumbai that money has become expensive but pressure on EXIM would ease gradually. Its net interest margin (NIM) moderated to 2.08 per cent at end of September 2022 (H1Fy23) from 2.19 per cent for FY22. The NIM was 1.84 per cent in FY21, according to an EXIM presentation.

Reflecting the rise in cost of funds, EXIM also hiked the lending rates. Its Marginal Cost of Funds Based Lending Rate (MCLR) for one year rose to 8.35 per cent in March 2023 from 8 per cent in January. MCLR may rise by 25-30 basis points further, said Bangari.

The institution’s loans and advances grew by 21.37 per cent to Rs 130,135 crore at end of December 2022 from Rs 10,718 crore at end of December 2022. EXIM expected 8-10 per cent growth in FY24.

As part of plans to expand services, India EXIM Bank is setting up a subsidiary in GIFT City Ahmedabad for trade refinance. Bangari said the unit has got approvals and expects to start work in FY24. While EXIM provides long-term credit, the subsidiary in GIFT will provide short-term funding.