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Exim Bank seeks more leveraging room for disbursals

Wednesday, 27 August 2014 - 3:41pm IST | Place: Mumbai | Agency: PTI

Exim Bank seeks more leveraging room for disbursals Kolkata, Aug 27 (PTI) State-owned Exim Bank is seeking more room for leveraging to fund projects for which it had requested the Reserve Bank of India.

"Our leveraging room so far had been 10 times the amount of equity and reserves as compared to 70 times of the Chinese Exim Bank," Yaduvendra Mathur, chairman & managing director, Exim Bank, said.
However, the RBI had raised this to 11 times of net-owned funds till March 31, 2015, Mathur told reporters on the sidelines of Ficci Banking Conclave here today.

In a parallel move, it had also requested its lone shareholder the government of India to inject more equity into the bank.

"The government had injected Rs 1,300 crore this fiscal, taking the paid-up capital to Rs 5,000 crore," Mathur said.

He said the bank had also urged the government to infuse Rs 2,500 crore every year over the next two fiscals to reach the authorised capital limit of Rs 10,000 crore.

Owing to lack of leveraging room of both the Exim Bank and Export Credit Guarantee Corporation (ECGC), the bank was facing constraints in extending project finance for lack of enough insurance cover.
"There are secured orders worth USD 8 billion of Indian companies gained abroad but the bank is not able to extend finance due to lack of insurance cover," Mathur said.

"If that is not done, then the overseas buyers will dump India and go to other countries," he added.

The bank was currently supporting project exports worth USD 24 billion and wants to treble this in the next three years, and the equity base for this has to increase as well as leveraging, Mathur said.

The bank in collaboration with others was also in the process of setting up a project development company in Africa aimed at providing early data on bankable projects in the region.

The other shareholders were African Development Bank, SBI, BoB and IL&FS. The entity's capital base would be USD 25 million.

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