EXIM Bank (100 Marks BlackBook)

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 57

A

Project
on
EXIM BANK
SUBMITTED BY
"student name"
Roll No : 50

T.Y.B.B.I. SEMESTER - V
PROJECT GUIDE
PROF. .........

SUBMITTED TO
UNIVERSITY OF MUMBAI
RAJASTHANI SAMMELAN'S
Ghanshyamdas Saraf College
of Arts & Commerce
Affiliated to University of Mumbai
Reaccredited by NAAC with 'A' Grade
S.V. Road, Malad (West)
Mumbai - 400064

A.Y. 2016 - 17

A
Project
on
EXIM BANK
SUBMITTED BY
"student name"
Roll No : 50

T.Y.B.B.I. SEMESTER - V
PROJECT GUIDE
PROF. .......

SUBMITTED TO
UNIVERSITY OF MUMBAI
RAJASTHANI SAMMELAN'S
Ghanshyamdas Saraf College
of Arts & Commerce
Affiliated to University of Mumbai
Reaccredited by NAAC with 'A' Grade
S.V. Road, Malad (West)
Mumbai - 400064
2

A.Y. 2016 - 17

RAJASTHANI SAMMELAN'S
Ghanshyamdas Saraf College
of Arts & Commerce
Affiliated to University of Mumbai
Reaccredited by NAAC with 'A' Grade
S.V. Road, Malad (West)
Mumbai - 400064
A.Y. 2016 - 17

CERTIFICATE
This is to certify that Mrs. "student name" Roll no : 50 of Third Year
B.com (Banking & Insurance) Semester V has Successfully
completed the project on "EXIM BANK " under the guidance of
Prof. ....... in the Academic Year2016 - 2017

Project

Guide

Principal :
Date :

External Examiner :

College

Seal :

Date :

DECLARATION
I, "student name" a Student of Ghanshyamdas Saraf College
of Arts & Commerce, Malad (West) T.Y.B.Com (Banking &
Insurance) SEMESTER - V Hereby declare that I have
completed my project on "EXIM BANK" In the academic Year
2016-2017. This Information is true and original to the best
of my knowledge.

Date

Signature of Student :

ACKNOWLEDGEMENT
To list who all have helped me in difficult because they are so
numerous and the depth is so enormous.

would

like

to

acknowledge

the

following

as being

idealistic

channels and fresh dimensions in the completion of this project.

I take this opportunity to thank the university

of Mumbai for

giving me chance to do this project.

would

like

to

thank

my

Principle

Dr.

Sujata

Karmakar

for

providing the necessary facilities required for completion of this


project.

I take this opportunity to thank our Chief Coordinator Dr. Lipi


Mukherjee and Course Coordinator Prof. Urvi Jain for their moral
support and guidance.

would also like

to express

my

sincere

gratitude

towards

my

Project Guide Prof. ........ who's guidance and care made the
project successful.

I would like to thank my College library, for having provided


various references books and magazines related to my project.

EXECUTIVE SUMMARY
This project is about the Export Import Bank. The Export and Import
business

in

India

has

developed

tremendously.

It

consist

the

information related to export and Import. The information is divided in


to different Chapter.
EXIM bank of India is a public sector financial institution established on
1st Jan 1982. It started its operation with the head office in Mumbai on
1st March, 1982. The EXIM bank was mainly created for the purpose of
financing medium and long-term loans to exporters and thereby
promoting the countrys foreign trade. EXIM Bank is the Co-ordinator of
the working group mechanism for clearance of Project and services
exports and deferred payment exports (for amounts above a certain
value currently US$ 100 million). The Working group comprises EXIM
Bank, Government of India representatives (Ministries of Finance,
Commerce, and External Affairs), and Reserve Bank of India, Export
Credit Guarantee Corporation of India Ltd. And commercial banks that
are authorised foreign exchange dealers. EXIM Bank offers the export
credit facilities, which can be availed of by Indian Companies. EXIM
Banks pre-shipment credit facility, in Indian rupees and foreign

currency, provides access to finance at the manufacturing stageenabling exporters to purchase raw materials and other inputs.

OBJECTIVES OF STUDY

To understand the concept of Export and Import Business.


To identify the scheme preference of Exporters and Importers.
To show the wide range of facilities available in Export and Import
Business by Bank.

THE SCOPE OF STUDY


Researcher found the following scopes:

To study the awareness among customers related to Export and

Import Business.
Future prospect of Export and Import.
Importance of Export and Import Business.

SOURCES OF DATA COLLECTION


The collection of data refers to a planned gathering of information
relevant to the subject matter of the study from the units under
investigation the method of collection of data depends mainly upon the
nature, objective and scope of the inquiry on one hand and available of
resources and time on the other hand. Data may be classified into
primary and secondary data, depending upon the nature and mode of
collection.

Mainly the data is collected from Secondary data.


Secondary data:
Secondary data collected from the published magazines and websites
to collect the data. The secondary data is collected from the following
sources.

Business magazines
Journals
Company broachers and books
Published books
Website

LIMITATION OF STUDY
The present study was not out of limitations. But as an internship
student it was a great opportunity for me to know the banking
activities EXIM Bank.

It is very different to collect the information form various personnel


for the job constrain.

Bank policy is not going to disclose some data and information for
obvious reasons.

Because of the limitation of information some assumption may be


made. So there may be some personal mistake in the report.

INDEX
CHAPTE
R

PARTICULARS
EXECUTIVE SUMMARY
OBJECTIVES OF STUDY
THE SCOPE OF STUDY
SOURCES OF DATA COLLECTION
LIMITATION OF STUDY

PAGE
NO.

INDIAN BANKING SYSTEM


1.1 INTRODUCTION

1.2 TYPES OF BANK

1.3 FUNCTIONS OF BANK

1.4 IMPORTANCE OF BANK

11

EXIM BANK
2.1 INRODUCTION

13

2.2 HISTORY OF EXIM BANK

14

2.3 FUNCTIONS OF EXIM BANK

14

2.4 ACTIVITIES OF EXIM BANK

15

2.5 OBJECTIVES OF EXIM BANK :

15

2.6 EXIM BANK - BUSINESS PROFILE

16

2.7 POLICIES OF EXIM BANK

23

STATISTICAL ANALYSIS AND DATA


INTERPRITATION
3.1 APPROVALS

27

3.2 LOAN PORTFOLIO

29

3.3 RESOURCES ANALYSIS

30

3.4 PROFIT BEFORE TAX AND AFTER TAX

31

ANALYSIS

33

3.5

BALANCE

TRANSFERRED

GOVT. ANALYSIS

TO

CENTRAL
34

3.6 OFFICES OF EXIM BANK

10

CASE STUDIES
4.1 CASE STUDY

36

4.2 DISCUSSION AND INTERPRETATION

38

4.3 CONCLUSION

40

4.4 BIBLIOGRAPHY

42

4.5 WEB SITES

42

11

CHAPTER 1 : INDIAN BANKING SYSTEM


1.1 INTRODUCTION :
A bank is a financial institution that provides banking and other
financial services to their customers. A bank is generally understood as
an institution which provides fundamental banking services such as
accepting deposits and providing loans. There are also nonbanking
institutions that provide certain banking services without meeting the
legal definition of a bank. Banks are a subset of the financial services
industry. A banking system also referred as a system provided by the
bank which offers cash management services for customers, reporting
the transactions of their accounts and portfolios, throughout the day.
The banking system in India should not only be hassle free but it
should be able to meet the new challenges posed by the technology
and any other external and internal factors. For the past three decades,
Indias banking system has several outstanding achievements to its
credit. The Banks are the main participants of the financial system in
India.
The Banking sector offers several facilities and opportunities to
their customers. All the banks safeguards the money and valuables
and provide loans, credit, and payment services, such as checking
accounts, mony orders, and cashiers cheques. The banks also offer
investment and insurance products. As a variety of models for
cooperation and integration among finance industries have emerged,
some

of

the

traditional

distinctions

between

banks,

insurance

companies, and securities firms have diminished. In spite of these


changes, banks continue to maintain and perform their primary role
accepting deposits and lending funds from these deposits.

Definition of banks :
According to Walter Leaf
A bank is a person or corporation which holds it out to receive from
the public, deposits payable on demand by cheque. Horace White has
defined a bank, as a manufacture of credit and a machine for
facilitating exchange.
According to Prof. Kinley
A bank is an establishment which makes to individuals such advances
of money as may be required and safely made, and to which
individuals entrust money when not required by them for use.

1.2 TYPES OF BANK

1. Central Bank
A central bank functions as the apex controlling institution in the
banking and financial system of the country. It functions as the
controller of credit, bankers bank and also enjoys the monopoly of
issuing currency on behalf of the government. A central bank is usually
control and quite often owned, by the government of a country. The
Reserve Bank of India (RBI) is such a bank within an India.
2. Commercial Banks
It operates for profit. It accepts deposits from the general public and
extends loans to the households, the firms and the government. The
essential characteristics of commercial banking are as follows:

- Acceptance of deposits from public - For the purpose of lending or


investment - Repayable on demand or lending or investment. Withdrawal by means of an instrument, whether a cheque or
otherwise.
Another distinguish feature of commercial bank is that a large part of
their deposits are demand deposits withdraw able and transferable by
cheque.
3. Development Banks
It is considered as a hybrid institution which combines in itself the
functions of a finance corporation and a development corporation.
They also act as a catalytic agent in promoting balanced and viable
development by assuming promotional role of discovering project
ideas, undertaking feasibility studies and also provide technical,
financial and managerial assistance for the implementation of project.
In India Industrial Development Bank on India (IDBI) is the unique
example of development bank. It has been designated as the principal
institution of the country for co-coordinating the working of the
institutions engaged in financing, promoting or development of
industry.
4. Co-operative Banks
The main business of co-operative banks is to provide finance to
agriculture. They aim at developing a system of credit. Agriculture
finance is a special field. The co-operative banks play a useful role in
providing cheap exit facilities to the farmers.
In India there are three wings of co-operative credit system namely
(i)
(ii)
(iii)
(iv)

Short term,
Medium-term,
Long term credit.
The former has a three tier structure consisting of state

5. Specialized Banks
These banks are established and controlled under the special act of
parliament. These banks have got the special status. One of the major

bank is National Bank for Agricultural and Rural development


(NABARD) established in 1982, as an apex institution in the field of
agricultural and other economic activities in rural areas. In 1990 a
special bank named small industries development Bank of India (SIDBI)
was established. It was the subsidiary of Industrial development Bank
of India. This bank was established for providing loan facilities,
discounting and rediscounting of bills, direct assistance and leasing
facility.
6. Indigenous Bankers
That unorganized unit which provides productive, unproductive, long
term, medium term and short term loan at the higher interest rate are
known as indigenous bankers. These banks can be found everywhere
in cities, towns, mandis and villages.
7. Rural Banking
A set of financial institution engaged in financing of rural sector is
termed as Rural Banking. the policy of financing of these banks has
been designed in such a way so that these institution can play catalyst
role in the process of rural development.
8. Saving Banks
These banks perform the useful services of collecting small savings
commercial banks also run saving bank to mobilize the savings of
men of small means. Different countries have different types of savings
bank viz. Mutual savings bank, Post office saving, commercial saving
banks etc.
9. Export - Import Bank
These banks have been established for the purpose of financing
foreign trade. They concentrate their working on medium and longterm financing. The Export-Import Bank of India (EXIM Bank) was
established on January 1, 1982 as a statutory corporation wholly
owned by the central government.

10. Foreign Exchange Banks


These banks finance mostly to the foreign trade of a country. Their
main function is to discount, accept and collect foreign bulls of
exchange. They also buy and self-foreign currencies and help
businessmen to convert their money into any foreign currency they
need. Over a dozen foreign exchange banks branches are working in
India have their head offices in foreign countries.
11. International Banks
The basic list of those International Banks within India which help the
banking sector of India to develop in International market.

1.3 FUNCTIONS OF BANK :

PRIMARY FUNCTIONS
1. Accepting Deposits :
The most important function of commercial banks is to accept deposits
from public. This is the primary functions of a commercial bank. Banks
receives the idle savings of people in the form of deposits and finances
the temporary needs of commercial and industrial firms. A commercial
bank accept deposit from public on various account, important deposit
account generally kept by bank are

(i) Saving Bank Deposits : This type of deposits suit to those who
just want to keep their small savings in a bank and might need to
withdraw them occasionally. One or two withdrawals up to a certain
limit of total deposits are allowed in a week. The rate of interest
allowed on saving bank deposits is less than that on fixed deposits.
Depositor is given a pass book and a cheque book. Withdrawals are
allowed by cheques and withdrawal form.
(ii) Current Deposits : This type of account are generally kept by
businessmen and industrialists and those people who meet a large
number of monetary transactions in their routine. These deposits are
known as short term deposits or demand deposits. They are payable
demand without notice. Usually no interest is paid on these deposits
because the bank cannot utilize these deposits and keep almost cent
per cent reserve against them. Overdraft facilities are also available on
current account.

(iii) Fixed Deposits : These are also known as time deposits. In this
account a fixed amount is deposited for a fixed period of time. Deposits
are payable after the expiry of the stipulated period. Customers keep
their money in fixed deposits with the bank in order of earn interest.
The banks pay higher interest on fixed deposits. The rates depend
upon the length of the period and state of money market. Normally the
withdrawals are not allowed from fixed deposits before the stipulated
date. If it happens, the depositor entails an interest penalty.

( iv ) Other Deposits

Banks also provide deposit facilities to

different type of customers by opening different account. They also


open. Home Safe Account for housewife or very small savers.

The other accounts are


Indefinite Period Deposit a/c,
Recurring Deposit a/c
Retirement Scheme etc.

2. Advancing of Loans :
The second main function of the commercial bank is to advance loans.
Money is lent to businessmen and trade for short period only. These
banks cannot lend money for long period because they must keep
themselves ready to meet the short term deposits. The bank advances
money in any one of the following forms .

(i) Overdrafts : Customers of good standings are allowed to overdraw


from their current account. But they have to pay interest on the extra
amount they have withdrawn. The banks allow overdrafts to their
customers just to provide temporary accommodation save the extra
amount withdrawn is payable within a period. The amount allowed in
overdraft varies from customer to customer depending on this
financial condition.

(ii) Loans : Loans are granted by the banks on securities which can be
easily disposed-off in the market, e.g. Government securities or shares
of approved concerns. When the bank has satisfied itself regarding the
soundness of the party, the loan is advanced. A borrower seldom wants
the whole amount of his loan in cash, so he opens the current account

with the bank (and the loan amount) and thus a deposit is created in
the books of the name in the bank.

(iii) Cash Credit : It is an arrangement by which a bank allows his


customers to borrow money up to a certain limit against certain
tangible securities as Government securities or shares of approved
concerns etc. In this case interest in charged on the actual amount
withdrawn by the customer and not on the limit allowed to him.

(iv)Discounting Bills : It is another important way of giving loans.


The banks purchase bills and immediately pay case for these bills after
deducting the discount (interest). After the maturity of the bills, the
banks get backits full value. Thus these bills are good liquid assets and
moreover this investment is also very safe.

SECONDARY FUNCTION
3. Agency Services :
Modern Banks render service to the individual or to the business
institutions as an agent. Banks usually charge little commission for
doing these services. These services are as follows(i) A bank collects cheques, bills and promissory notes and receives
their payments.
(ii) A bank collects dividend or interest on stock and shares. It also
collects subscriptions and insurance premium.

10

(iii) A bank also buys and sells securities on behalf of its customers. It
also not charges anything from the customers for this but gets some
commission from the stock broker.
(iv) A bank acts as trustee or an executor on behalf of its customers in
the administration of a will or of settlement.
(v) Lastly a bank helps in the transfer of funds from one bank or branch
to another.

4. Other Services :
A modern bank now a day serves its customers in many other
ways:
(i) A bank issues personal and commercial letters of credit. Through
these letters of credit customers are able to benefit themselves out of
the superior credit of the bank.
(ii) A bank also helps in the transaction of foreign exchange business.
(iii) A bank has Safe Deposit Vaults. It undertakes the safe custody of
valuables and important documents. The bank acts as bailey of these
goods or documents.

1.4 IMPORTANCE OF BANK

11

Banks play an important role in the economic growth of a country. In


the modern set up, banks are not to be considered dealers in money
but as the leaders of development. The importance of bank for a
countrys economy can be explained in following ways Banks by playing attractive interest rate on deposits try to promote
thrift and savings in an economy. The investment of these savings in
productive channel results in capital formation.
The scattered small savings in the country can be put to optimum
use by commercial banks. Banks utilize this amount by giving loans
to industrial houses and the government. By providing funds to the
entrepreneurs, bank help in increasing productivity of capital.
Banks help in remitting money from one place to another. The
cheque, bank draft, letter of credit, bills, hundies enable traders to
transfer large sums of money from one place to another.
By their ability to create credit, the banks have placed at the
disposal of the nation a large amount of money. The bank can
increase the supply of money through credit creation
With the growth of banking activity, employment opportunity in the
country has increased to a considerable extent.
The banks help in capital formation in the country. A high rate of
saving and investment promote capital formation.
Money deposited in the bank and other precious items are now
absolutely safe. For keeping valuables, banks are providing locker
facilities. Now people are free from any type of risks.

12

CHAPTER 2 : EXIM BANK

2.1 INRODUCTION :
The Export-Import Bank of India (Exim Bank) completed 24 years of
operations in March 2006. It was established by an Act of Parliament
known as the Export-Import Bank of India Act 1981 and commenced
operations in March 1982. Exim Bank is wholly owned by the
Government of India. Exim Bank was set up for the purpose of
financing, facilitating and promoting foreign trade in India and also to
13

provide financial assistance to exporters and importers and for


functioning as the principal financial institution for coordinating the
working of institutions engaged in financing export and import of goods
and services with a view to promoting the countrys international
trade.
It has a high-powered Board of Directors comprising: A Deputy
Governor of Reserve Bank of India, Chairmen of IDBI, ECGC,
Representatives of the Ministries of Finance, Commerce, Industry,
External Affairs and Planning, Chairmen of scheduled banks and
professionals from trade and industry.
Over the years, Exim Bank has developed 35 lending

programmes

covering all stages of the export cycle namely Import of Technology,


Export Product Development, Export Production, Export Marketing ,
Pre-shipment, Post-shipment, Investment Abroad.

2.2 HISTORY OF EXIM BANK :


EXIM Bank Ltd. was established under the rules and regulations of
Bangladesh Bank and the Bank companies act. 1991, on the 3rd
August 1999 with the leadership of later Mr. Shahjan Kabir, founder
chairman. He had a long experience as a good banker. Among them Mr.
Nazrul Islam Mazumder became the honorable chairman aft4er the
demise of the honorable.
From this inception EXIM Bank Bangladesh Ltd. was known as BEXIM
Bank Ltd., which stands for Bangladesh Export Import Bank Limited.
But some legal constraints the bank renamed as EXIM Bank Ltd. which
means Export Import Bank Bangladesh Limited. The bank starts its
functioning from the 3rd August 1999 with Mr. Alamgir Kabir, FCA as
the advisor and Mr. Mohammad Lakiotullah as the Managing Director.
14

Both of them have long experience in financial sector of our country.


By this pragmatic decision and management directives in the
operational activities, this bank has earned a secured and distinctive
position in the banking industry in terms of performance, growth and
excellent management. The authorized capital and paid up capital of
the bank are Tk. 1,000.00 million and Tk. 253.13 million respectively.

2.3 FUNCTIONS OF EXIM BANK :


The important functions of Exim Bank are as follows:
(i) It provides direct financial assistance to exporters of plant,
machinery and related service in the form of medium-term credit.
(ii) Underwriting the issue of shares, stocks, bonds, debentures of any
company engaged in exports.
(iii) It provides rediscount of export bills for a period not exceeding 90
days against short-term usance export bills discounted by commercial
banks.
(iv) The bank gives overseas buyers credit to foreign importers for
import of Indian capital goods and related services.
(v) Developing and financing export oriented industries.
(vi) Collecting and compiling the market and credit information about
foreign trade.

2.4 ACTIVITIES OF EXIM BANK :

Export-Import Bank of India plays the role of source of finance,


promoter, coordinator and consultation to Indias Foreign Trade. The
bank is the coordinator of the Working Group Mechanism for the
clearance of projects, service exports and deferred payment exports.
This group comprises of Exim Bank and Government of India
representatives from the Ministries of Finance, Commerce and external
Affairs, Export Credit Guarantee Corporation of India Ltd, commercial
banks that are certified foreign exchange dealers and the Reserve
Bank of India. This working group gives clearance to contracts

15

sponsored by Exim Bank or commercial banks and operates as a single


window mechanism for clearance of export proposal terms

2.5 OBJECTIVES OF EXIM BANK :


The main objective of the study is to examine and explore the
marketing practices and policies of EXIM Bank Bangladesh Ltd. The
study also discovers the functions, corporate mission and the social
commitment of the bank. However, the objectives of the study can be
divided into two basic parts:
Primary objectives of the study are:
To explore the major marketing policies and practices of EXIM Bank.
To examine how Bank Marketing is applied by EXIM Bank
Bangladesh Ltd.
To find out the strengths, weaknesses, opportunities and threats of

EXIM Bank by conducting a SWOT analysis.


To assess the marketing mix strategies of the bank:
Product / Service strategy.
Pricing strategy.
Location (place) strategy.
Promotional strategy.

Secondary objectives of the study are:


To explore the corporate mission of EXIM Bank Bangladesh Ltd.
To examine the functions of EXIM Bank.
To assess the social commitment of the bank.

2.6 EXIM BANK - BUSINESS PROFILE


THE OPERATIONS ARE GROUPED AS BELOW
EXPORT CREDITS
Bank provides exports of Indian machinery, manufactured goods,
consultancy and technology services on deferred payment terms

16

Lines of credit/buyer's credits are extended to overseas entities


i.e. governments, central banks, commercial banks, development
finance institutions, regional development banks for financing

export of goods and services from India


1. Project Finance
2. Trade Finance
EXPORT CAPABILITY CREATION
Export Product Development
Export Marketing Finance
Export Oriented Units
1. Project Finance
2. Working Capital
3. Production Equipment Finance
European Community Investment Partners (ECIP)
Asian Country Investment Partners (ACIP)
Overseas Investment Finance
Export Facilitation Programmes
1. Software Training Institutes
2. Minor Ports Development
EXPORT SERVICES
In addition to finance, Bank provides a range of information and
advisory services to Indian companies to supplement their efforts
aimed at globalisation of Indian business.

SUPPORTING GROUPS
1.
2.
3.
4.
5.
6.

Planning & Research


Corporate Finance
Legal
Corporate Affairs
Human Resource Management
Establishment

FINANCE BY EXIM BANK :

EXIM INDIA offers a range of financing programmes that match

the menu of Exim Banks of the industrialized countries. However, the


Bank is atypical in the universe of Exim Banks in that it has over the
17

years evolved, so as to anticipate and meet the special needs of a


developing country. The Bank provides competitive finance at various
stages of the export cycle covering:
EXIM INDIA operates a wide range of financing and promotional
programmers. The Bank finances exports of Indian machinery,
manufactured goods, consultancy and technology services on deferred
payment terms. EXIM INDIA also seeks to co finance projects with
global and regional development agencies to assist Indian exporters in
their efforts to participate in such overseas projects.
The Bank is involved in promotion of two-way technology
transfer through the outward flow of investment in Indian joint
ventures overseas and foreign direct investment flow into India. EXIM
INDIA is also a Partner Institution with European Union and operates for
facilitating promotion of joint ventures in India through technical and
financial collaboration with medium sized firms of the European Union.

SERVICE PROVIDED BY EXIM BANK :


1. Export Credit

Pre-shipment credit

Supplier's credit

For Project exporters

For Exporters of consultancy and technological services

Guarantee facilities

For commercial Banks

For Overseas entities it provides Buyers Credit

2. Finance for Export Oriented Units

18

Term

Finance (For Exporting Companies)


Project Finance
Equipment Finance
Import of Technology & Related Services
Domestic Acquisitions of businesses/companies/brands
Export Product Development/ Research & Development
General Corporate Finance
Working Capital Finance (For Exporting Companies)

3. Overseas Investment Finance

Finance for Indian Company's equity participation in the overseas


Joint Venture (JV)/ Wholly Owned Subsidiary (WOS)

Direct Finance (Term & Working Capital) to the overseas JV / WOS

Finance for acquisition of overseas businesses / companies

Direct Equity by Exim Bank in the overseas JV/ WOS of an Indian


Company

4. SME & Agri finance

EXIM Bank has a dedicated Agri Business Group to cater to the


financing needs of export oriented companies dealing in
agricultural products

Financial assistance is provided by way of term loans, preshipment/post-shipment credit overseas buyers' credit, bulk
import finance, guarantees

The Bank has strong linkages with other stakeholders in agri


sector such as Ministry of Food Processing Industries, NABARD,
APEDA

Apart from financing, the Bank also provides a range of advisory


services to agri exporters

19

Tie-up with a number of commercial banks for easier credit


delivery

EXIM Bank has signed a Memorandum of Cooperation with DHAN


Foundation, Madurai (a leading NGO covering 3 lakh families in 4
states) for advisory and financial support for export related
activities for their grass root enterprises

Exim Bank has signed Memorandum Of Cooperation with BASIX,


Hyderabad. BASIX promotes development for the rural poor and
women, mainly through Micro-credit and Micro Finance

Exim Bank has initiated discussion with handloom weavers


cooperative societies in Fulia (West Bengal) for marketing their
products overseas

5. Export Services

Information and support services to Indian companies to help


improve their prospects for securing business in multilateral
agencies funded projects

Information on Procurement Guidelines, Policies, Practices of


Multilateral Agencies

Assistance for Registration with Multilateral Agencies

The Bank provides assistance to Indian companies, to enable


them establish their products in overseas markets through its
Export Marketing Services

Tie-up with

International Finance Corporation, Washington D.C.

20

Eastern & Southern African Trade & Development Bank (PTA


Bank)

African Management Services Company (AMSCO), Netherlands

Management of EXIM Bank :


For any financial and non financial organization Management is the
most valuable and important resources of any kind of organization. And
a well-organize management provides the organization to reach its
ultimate goal. Management means planning, organizing, staffing,
directing and controlling of all financial and non financial resources of
an organization. Different aspects of management practice in EXIM
Bank are discussed below.

Planning:

EXIM Bank has done its planning within the purview of the corporate
plan. The overall planning approach of EXIM Bank is Top-down. Each
branch can plan according to the goal imposed by the corporate level.
It doesnt plan independently. And, EXIM Bank has a planning division.
This department is mainly responsible for the overall planning.

Organizing

EXIM Bank is organized as per the existing business locations. It has


twenty eight branches, each of which is a separate entity. Each unit is
responsible for its own performance and a senior Vice President (SVP)
followed by Managers each. He is directly responsible for performance
of their unit. Within each branch it is organized functionally.

Staffing

21

The recruitment of EXIM Bank is done in two ways. One as a


probationary officer for the management program and it has
probation period of one year. Another one is non-management level as
Trainee Officer Probationary officer is recruited in officer category
and their career path is headed towards different managerial jobs.

Directing and controlling

The management approach in EXIM Bank is top-down or authoritative.


Information just seeks through lower management layer. Works are
designed in such a way that cannot leave without clearing the tasks as
he is assigned for a day. Sitting Management in all office is done in way
that the superior can monitor the subordinate can all time. Budgeting,
rewarding, punishing etc. are also practiced as control mechanism.

Human resource Practices in EXIM Bank

Employees are the core resources of any organization. Without them,


one cannot run their organization. And , human resource is concerned
with the growth and development of people toward higher level of
competency, creativity and fulfillment. It help employees become
better more responsible person and then it tries to create a climate in
which they contribute to the limits of their improved abilities. It
assumes that expanded capabilities and opportunities for people will
lead directly to improvements in operating effectiveness. Essentially,
the human resource approach means that people achieve better result.

Recruitment

The set-vice rule of EXIM Bank states the recruitment policy of the
bank. In general the board of directors determines the recruitment
policy of bank from time to time. The minimum entry level qualification
for any official position other than supportive management is a

22

Bachelors degree. However, informally the management prefers a


minimum masters degree for the appointed of probationary officers in
the Executive officer position. The recruitment for entry level positions
begins with a formal written test which is conducted and supervised by
the Institute of Business Administration, University of Dhaka. After
successful completion of the written test, a personal interview is
conducted for the successful candidates by a panel of experts
comprising of renowned and prominent bankers of the country.

2.7 POLICIES OF EXIM BANK

23

1. LOANS TO INDIAN COMPANIES :


DEFERRED PAYMENT EXPORTS :
Term finance is provided to Indian exporters of eligible goods and
services

which enable them to offer deferred

buyers. Deferred

credit

can

also

cover

credit to overseas
Indian

consultancy,

technology and other services. Commercial banks participate in


this program directly or under risk syndication arrangements.

PRESHIPMENT CREDIT:
Finance is available form Exim Bank for companies executing export
contracts involving cycle time exceeding six months. The facility
also

enables

provision

of

rupee

mobilization

expenses

for

construction/turnkey project exporters.

OVERSEAS INVESTMENT

FINANCE :

Indian companies establishing joint ventures overseas are provided


finance towards their equity contribution in the joint venture .

FINANCE FOR EXPORT MARKETING :


This program,

which is a component

of a World Bank loan, helps

exporters implement their export market development plans

24

2.

LOANS TO FOREIGN GOVERMENTS, COMPANIES

AND FINANCIAL INSTITUTIONS


OVERSEAS BUYER'S CREDIT: Credit is directly offered to foreign
entities for import of eligible goods and related services, on deferred
payment.

LINES OF CREDIT: Besides foreign governments, finance is available


to foreign financial institutions and government agencies to on-lend in
the respective country for import of goods and services from India.

RELENDING FACILITY TO BANKS OVERSEAS: Relending facility


is extended to banks overseas to enable them to provide term finance
to their clients world -wide for imports from India.

3. LOANS TO COMMERCIAL BANKS IN INDIA


EXPORT BILLS REDISCOUNTING :
Commercial Banks in India who are authorized to deal in foreign
exchange can rediscount their short term export bills with Exim Banks,
for an unexpired usance period of not more than 90 days.

REFINANCE OF EXPORT CREDIT :


Authorized dealers in foreign exchange can obtain from Exim Bank
100% refinance of deferred payment loans extended for export of
eligible Indian goods.

25

GUARANTEEING OF OBLIGATIONS :
Exim Bank participates with commercial bank s in India in the issue of
guarantees required by Indian companies for the export contracts and
for execution of overseas construction and turnkey projects.

CHAPTER 3 : STATISTICAL ANALYSIS AND DATA


INTERPRITATION
We have Analysed the Financial Performance of EXIM
BANK OF INDIA and the total net profit transferable to
the Central Government.
General Performance In The Last 7 Years

26

PARAMETER

200708

Approvals
Loan
Portfolio
Guarantees

2008-

2009-

09

2012-

2013-14

10

2010-11

12

13

477984

44411

41918

482600

456558

9
53889

5
64353

745983

328045

33628

38843

287767

5
34156

0
39035

2011-

34556

Portfolio
Paid-up-

11000

35401 22736
14000
17000

30557
20000

32407
23000

47440
30594

53668
37594

Capital
Reserves

21064

24681

28316

32302

37003

41796

45504

Borrowings

317163

37202

40508

471918

54654

64484

714821

3330

3
4774

8
5135

5836

6
6751

8
7423

7098

Profit After
Tax

Before analyzing the trend of the financial statement of EXIM BANK, we


should firstly try to know about the different PARAMETERs used

3.1 APPROVALS
Loan approval basically means the formal authorization of getting a
loan usually by a bank. This is one of the most important tasks done by
a bank. This process supplies the life blood to the bank i.e., the earning
from interest. If the amount of loan approval is having an increasing
trend then it's really beneficial to the organization. This proves that the
27

organization is working well and will have a bright future. If we take a


look in the loan approvals of EXIM BANK for the years 2004-05 to 201314 we can see that there is always an increasing trend .A fall is though
observed in the year 2011-12 & 2012-13 which was due to global crisis
and the fall in the GDP. It should be noted that the amount of approval
is again following its normal trend of increasing. It could be better
understood with the help of the following graph.

Graph 1: Approvals Analysis:

28

APPROVALS

600000
500000
400000
300000
200000
100000
0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Approvals :
2007-08 = 328045
2008-09 = 336285
2009-10 = 388430
2010-11 = 388430

29

2011-12 = 444119
2012-13 = 419185
2013-14 = 482600

30

3.2 LOAN PORTFLIO


Loan Portfolio basically shows the amount of loan which is granted.
This is treated as an asset in the financial statement of the
institution. In case of EXIM BANK the loan portfolio is having an
increasing trend as shown in the graph below :

Graph 2: Loan Portfolio Analysis:


LOAN PORTFOLIO

800000
700000
600000
500000
400000
300000
200000
100000
0
2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

In the above graph we see that the amount of loan portfolio is


increasing year after year i.e., the amount of assets is increasing. As
the assets of the organization is increasing its profitability also
increases giving an upward thrust to the financial position of EXIM
BANK

31

3.3 RESOURCES ANALYSIS


RESOURCES

OF

EXIM

BANK

OF

INDIA

In this graph we can see that BORROWINGS is the main source of


RESOURCE for EXIM BANK OF INDIA, followed by RESERVES and
PAID-UP-CAPITAL. One thing is to be noted that even after having
such high amount of borrowing and paying the interest, the bank is
yielding high profits. This can be best understood with the help of
the next figure showing the PROFIT BEFORE TAX (PBT) AND PROFIT
AFTER TAX (PAT)
32

3.4

PROFIT AFTER TAX AND PROFIT BEFORE TAX

ANALYSIS
PROFIT BEFORE TAX AND PROFIT AFTER TAX ANALYSIS
12000
10000
8000
PBT

6000

PAT
4000
2000
0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

(Amounts in millions)
In 2007-08 PBT is 5334 and PAT is 3330, 2008-09 PBT is 6101 and
PAT is 4774, 2009-10 PBT is 7724 and PAT is 5135, 2010-11 PBT is
8677 and PAT is 5863, 2011-12 PBT is 10126 and PAT is 6751, 2012-

33

13 PBT is 10888 and PAT is 7423, 2013-14 PBT is 10202 and PAT is
7098.
In the above figure we can see that the EXIM BANK OF INDIA is
earning high amount of profits even after paying the heavy amount
of interest on the borrowings. There is an increasing trend in the
profit earning capacity of the organization. There is a very small fall
in the amount of profit in the year 201314, which is due to the very huge increase in THE PROVISION FOR
LOAN, LOSSES/CONTINGENCIES, DEPRECIATION ON INVESTMENTS
which is about Rs.774,58,91,595 more compared to the last year
2012-13.

Before commenting upon the financial performance of the bank we


must look into INCOME/EXPENDITURE PROCESS of the bank. The
registered Profit Before Tax (PBT) of General Fund is taken into
account, then tax is paid and we arrive at Profit After Tax (PAT). Out
of this profit, an amount is transferred to Reserve Fund. In addition,
the Bank has to transfer a fixed percentage on PAT to Sinking Fund
and an amount to the Special Reserve as u/s 36(1)(viii) of the
Income Tax Act,
1961. The balance amount will be then transferred to the CENTRAL
GOVERNMENT as provided in the EXPORT-IMPORT BANK OF INDIA
ACT, 1981.

34

3.5

BALANCE

TRANSFERRED

TO

CENTRAL

GOVERNMENT ANALYSIS
BALANCE TRANSFERRED TO CENTRAL GOVERNMENT ANALYSIS

4000
3500
3000
2500
2000
1500
1000
500
0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

35

2007-08 = 1008
2008-09 = 1157
2009-10 = 1500
2010-11 = 1850
2011-12 = 2050
2012-13 = 2690
2013-14 = 3390

3.6 OFFICES OF EXIM BANK :


A network of 14 offices in India and Overseas
Domestic Offices :
Ahmadabad, Bangalore, Chennai, Guwahati, Hyderabad, Kolkata,
Mumbai, New Delhi, Pune.

36

Overseas Offices :

Budapest, Johannesburg, London, Singapore, Washington DC.

37

Head Office
Centre
World
Cuffe

One

Building,

Trade
Parade,

Floor

Centre
Mumbai

21,
Complex,

400

Phone:

005.
22185272,

Fax:

22182572

E-mail: [email protected]

CHAPTER 4 CASE STUDIES


4.1 CASE STUDY :
EXIM Bank of India Raises US$ 500 mn for 5.5 Year
Tenor at a coupon of 3.125% Per annum
The Export-Import Bank of India, successfully launched a 5.5 year
Reg S Bond issue of US$ 500 mn on January 13, 2016. The issue
attracted a total order book in excess of USD 1.25 bn. thereby
achieving 2.5x oversubscription of the issue size from over 110

38

investors. The funds thus raised will be used by the Bank to support
Indian project exports and overseas investment by way of long term
credit.
The 5.5 year US$ 500 mn Eurodollar bond issue was priced at 165
basis points over US Treasuries (UST) at a fixed coupon of 3.125%
p.a. providing minimal NIP against a very conservative market
backdrop with volatility in equity markets, declining crude prices and
simmering geopolitical tensions. This tightly priced benchmark size
transaction paves the way for other issuers from India. Citigroup, JP
Morgan and Standard Chartered Bank acted as Joint Lead Managers
and book runners for the offering. Exim Bank of India has been rated
as BBB- by Standard and Poors and Baa3 by Moodys, same as
the rating of Government of India.
Speaking on the occasion, Mr. Yaduvendra Mathur, Chairman and
Managing Director of Exim Bank, said, The size of the order book
and the quality of the investor names showcases the markets
confidence in India as well as the Exim Bank, particularly in a
challenging market. We have worked assiduously to maintain
communication bridges with overseas investors and to sell the India
story.
The Notes were distributed to high quality fixed income accounts
such as asset management companies, public and private banks,
pension funds, insurance companies and central banks as well as
sovereign wealth funds. Over 47% of the issue was distributed to
Asian investors, 46% to European and Middle East investors and
remainder primarily to offshore US investors. Mr. David Rasquinha,
Deputy

Managing

Director

of

Exim

Bank,

commented,

The

transaction was priced with minimal new issue premium amidst very
tentative markets, where most of the highly rated, repeat issuers
from Asia have paid higher single digit new issue premium for their
issuances from start of the year. Exim Bank had been closely
monitoring the market for an opportune window since the beginning
39

of the year and the swift intra-day execution allowed us to take


advantage of supportive market backdrop amid recent volatility and
challenging market conditions.
Exim Bank aims to promote Indias international trade and
investment. The Bank offers Indian companies a comprehensive
range of products and services, supported by analysis and research,
with a view to enhancing their international competitiveness. The
Bank aggressively supports Indian exporting companies, especially
medium-sized enterprises, in their globalisation efforts through a
variety of lending programmes.
For further information, please contact Mr. Samuel Joseph, Chief
General Manager, Treasury & Accounts Group, Export-Import Bank of
India, Centre One Building, Floor 21, World Trade Centre Complex,
Cuffe

Parade,

22182497;

Mumbai

E-mail: Exim

400005.
Banks

Telephone

Study

22172644,

highlights

Potential

Fax:
for

Enhancing Indias Engagements with Cambodia, Lao PDR, Myanmar,


Vietnam (CLMV)

4.2 DISCUSSION AND INTERPRETATION


The following are the finding of the project:

EXIM BANK OF INDIA is a wholly Government owned unit.


Thus huge amount of grants are given by the Government to

40

the bank, in return bank gives huge amount of taxes along with
the balance of profit. If consider this grant to be the investment

then the PBT is the amount of return.


The EXIM BANK OF INDIA had expended very high in the year
2013

-14

for

THE

LOSSES/CONTINGENCIES,

PROVISION

DEPRECIATION

ON

FOR

LOAN,

INVESTMENTS

which is about Rs.774,58,91,595 more compared to the last


year 2012-13. Due to this the general trend of increasing PAT &
PBT has been hindered. This may lay a negative impact in the
eye of the general public. Proper cost control method should be

adopted.
A very unique

way

of

transfer

of

profit

to

CENTRAL

GOVERNMENT is seen. The registered Profit Before Tax (PBT) of


General Fund is taken into account, then tax is paid and we
arrive at Profit After Tax (PAT). Out of this profit, an amount is
transferred to Reserve Fund. In addition, the Bank has to
transfer a fixed percentage on PAT to Sinking Fund and an
amount to the Special Reserve as u/s 36(1)(viii) of the Income
Tax Act, 1961. The balance amount will be then transferred to
the CENTRAL GOVERNMENT as provided in the EXPORT-IMPORT

BANK OF INDIA ACT, 1981.


One thing is to be taken into account that the BORROWINGS are
the main source of RESOURCE for EXIM BANK OF INDIA which
is increasing every year, even after paying the high amount
of interest and part of the principal amount the institution is
earning very high amount of profits. This clearly shows the
bright future of the EXIM BANK OF INDIA and its relevance in
Export Financing.

In this paper we have taken into account Export Financing and


other factors contributing to the growth of export. The paper
highlights the establishment, role, functions and objectives of the
EXIM BANK OF INDIA. Developing countries like India concentrates
more on increasing the value and volume of the export turnover to
41

attain

economic

developments

to

provide

employment

opportunities to utilize all the available resources and to finance for


exports. But the export sector involves high amount of risk. The
Indian exporters have to be protected from several types

of

risks involved in export business. Here EXIM BANK plays vital role.
By improving the performance of export, bank is in better position
to extend its services to all types of exporters effectively. EXIM
Banking of course, extend beyond international banking which in its
narrow sense relates to delivery of trade products and services to
business and trade Customers. Thus, The EXIM BANK of India is
regarded as the drivers behind global trade and corporate
globalization. The need for coordination between banks and
financial institutions, role of EIGC in timely settlement of claims are
impetus for a favourable export business. The stress is on
introducing the new innovative services of counter trade, overseas
borrowings, international factoring and bankers acceptance for
accelerating promotion of exports. This comparison of the financial
data shows the increasing trend of profits and the balance of profit
which is been transferred to the Central Government is increasing,
making EXIM BANK OF INDIA a successful Government institution.

4.3 CONCLUSION :
42

Many economists argued that EXIM Bank sector represented the


new beginning of the international capitalism. They traced the
evolution

of

the

EXIM

Bank

sector

to

the

development

of

transnational corporations. In this context the evolution of the


international

banking

came

as

response

to

the

modern

phenomenon of capital which obviously goes beyond national


borders. At the same time the rapid growth and boom of the
technology sector gave a great incentive and facilitated the creation
of the international EXIM Bank area. This permitted global access of
world market information and subsequently its management and
control.
Under the traditional national and international sectors there were
several constraints which gave the possibility for offshore activity to
grow. These are: the extension of national tax bases; intermittent
fiscal and monetary instabilities; the existence of foreign exchange
controls

and

fluctuations;

limiting

cross-border

controls;

conservative banking laws and regulations with regard to foreign


and domestic industrial entry, systems of supervision and liquidity
requirements, constraints on the issue of foreign and domestic
bonds, the admission of securities to capital markets, stock
exchange, insurance regulations ; company laws which restricted
business.
Also it has to be mentioned from the international perspective there
was a lack of coherent set of international fiscal principles and laws
in which transnational company could operate across border.
The evolution of the EXIM Bank center is described from the
perspective of its tax and banking functions. More recently,
however, other constraints onshore have served as an incentive
element

which

pushed

for

offshore

investment

and

have

emphasized the importance of that investment. These include: the


need to provide for what is seen as the vulnerability of professionals
and investors to creditors; the desire to avoid onshore laws and
43

regulations which mandate the reservation of assets to spouses and


heirs; the need for savings and investment vehicle for ordinary
persons.
EXIM Bank center came with innovative solutions to all these
constraints that were mentioned above. Let us refer for example to
taxation. There are 3 models of EXIM Bank centers from the
perspective of taxation: with zero-tax (here even residents do not
pay taxes); with low-tax; tax at normal rates but exemption or other
preferential treatment is granted to non-resident investors or
investment for certain categories of income. Notwithstanding the
fact that the above categories refers only to tax aspects of EXIM
Bank activity, it clearly shows the scope of such centers.

44

4.4 BIBLIOGRAPHY :

INTERNATIONAL BANKING & FINANCE

By Vipul Prakashan
- Gawrdan Natrajan

INTERNATIONAL BANKING & FINANCE

- K. Vishwanathan

INNOVATION IN BANKING AND INSURANACE

- Romeo S. Mancarenhas

4.4 WEB SITES :

www.Wikipedia.com

www.ANSWERS.COM

www.EXIM.com

www.eximbankindia.in

www.yourarticlelibrary.com

45

You might also like