)
The government today approved the proposal of Rs 700 crore capital infusion in Export-Import Bank of India to support future growth of the lender.
The fund infusion during 2013-14 will ensure compliance to the regulatory norms on capital adequacy, cater to the credit needs of productive sectors of economy as well as to withstand impact of stress in the economy, an official statement said after the Cabinet meeting here.
This will also boost the confidence of exporters, it said, adding, the infusion of Rs 700 crore in the equity capital would enable the bank to raise higher amount of borrowings and thereby, support Indian exporters to secure large overseas projects through on-lending.
It will also help the bank to grow its loans and advances portfolio at 14 per cent which will be below the targeted rate of 19 per cent as per the medium-term business strategy (MTBS) of the bank, it said.
The government had already made Budgetary provision for the capital infusion.
The Exim Bank was set up as a corporation in 1982 under the Export Import Bank of India Act, 1981 for providing financial assistance to exporters and importers and for functioning as principal financial institution.
The bank's aggregate resource raising by means of borrowings is subject to RBI prescribed ceiling of 10 times of the bank's net-owned funds.
As a result, the bank's ability to extend financial support to Indian exporters for securing and executing large-sized projects overseas is constrained, it noted.
