The Exim Bank of India has decided to postpone plans of raising funds through private placement as there has been no signs of a rise in export credit. The Exim Bank had announced plans of entering the private placement market while declaring its results for fiscal 1996-97.
The bank also had plans of raising Rs 300 crore in September 96. As demand for export credit has fallen exporters have kept away.
This apart, the bank can easily access line of credit in foreign currency at a lower rate which prevents them from entering the debt market too often, a market source said while explaining the twin factors which had affected the bond issue plan.
According to CMIE July report, exports growth have slowed down to two per cent in June from eight per cent in the previous month. Exports growth stood at 12 per cent in June 1996. Cumulative exports during April to June amounted to $8.13 billion which is lower by one per cent against the 15 per cent growth recorded during April to June 1996.
Recently, the bank had announced plans of raising Rs 6,000 crore from the market over the next five years.
The Union ministry of commerce feels that exports during 1997-98 would be less than the targeted amount of $40 billion due to the depressed international markets and seasonal factors affecting domestic production.
According to the bank's officials, there has been no improvement in sanctions over the March level.
However, if a comparison is made on a quarter-to-quarter basis then there has been an improvement, the official added.
Meanwhile, the bank has raised $50 million at 57 basis points above Libor, which according to market sources has replaced the private placement borrowing programme of the bank. The loan has a seven-year tenure and provides a put and call option after five years.
