 "Govt asks RBI to provide low interest-rate loans to EXIM Bank")
The Reserve Bank of India (RBI) has received a proposal from the Commerce and Industry Ministry to use a part of forex reserves to give long-term loans at low-interest rates to the Export Import Bank of India, the Parliament was informed on Friday.
"The RBI was requested to earmark a portion of forex reserves to Exim Bank for project export finance," the Minister of State For Finance Santosh Kumar Gangwar said in a written reply to Lok Sabha.
He said the RBI offered the unutilised amount under its limit of $5 billion sanctioned to the India Infrastructure Finance Company Ltd (IIFCL) as a long term loan to Exim Bank.
However, he said, IIFCL indicated that the RBI had committed the entire quantum of $5 billion to its borrowers and that there would not be any residual or unutilised amount which could be offered to Exim Bank.
"With its sound financials and investment grade rating on par with the sovereign, Exim Bank is currently able to command very competitive pricing in its foreign currency debt issues," he added.
He also said an amount of Rs 1,300 crore was released to Exim Bank by the government in 2015-16 as capital.
"Exim Bank had requested the RBI for increasing the 'umbrella limit' (a short-term borrowings such as term deposits, term money borrowings and commercial papers) as a part of the total borrowing limit prescribed by the RBI under the Resource Raising Norms and relaxation of the leverage multiple of 10 times of the bank's net owned funds, for borrowings that can be raised by the Bank," he added.
