1 / 29

Exim Bank’s Lines of Credit and Buyer’s Credit under NEIA Harare, Zimbabwe March 12, 2014

Exim Bank’s Lines of Credit and Buyer’s Credit under NEIA Harare, Zimbabwe March 12, 2014. Exim Bank of India. SET UP BY AN ACT OF PARLIAMENT IN SEPTEMBER 1981 WHOLLY OWNED BY GOVERNMENT OF INDIA COMMENCED OPERATIONS IN MARCH 1982 APEX FINANCIAL INSTITUTION OBJECTIVES:

orsin
Download Presentation

Exim Bank’s Lines of Credit and Buyer’s Credit under NEIA Harare, Zimbabwe March 12, 2014

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Exim Bank’s Lines of Credit and Buyer’s Credit under NEIA Harare, Zimbabwe March 12, 2014

  2. Exim Bank of India • SET UP BY AN ACT OF PARLIAMENT IN SEPTEMBER 1981 • WHOLLY OWNED BY GOVERNMENT OF INDIA • COMMENCED OPERATIONS IN MARCH 1982 • APEX FINANCIAL INSTITUTION • OBJECTIVES: “… for providing 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 country’s international trade…” “… shall act on business principles with due regard to public interest” (Export-Import Bank of India Act, 1981)

  3. Evolving Vision Product Centric Approach “To develop commercially viable relationships with a target set of externally oriented companies by offering them a comprehensive range of products and services, aimed at enhancing their internationalisation efforts” Export Credits 1982-85 Export Capability Creation 1986-94 Comprehensive Range of Products And Services – All Stages of the Export Business Cycle – Customer Centric Approach Exim Bank TODAY Leadership and Expertise in India’s Export Finance

  4. Management Board of Directors (16)* OFFICES Domestic Offices: 10 • Ahmedabad • Bangalore • Chandigarh • Chennai • Guwahati • Hyderabad • Kolkata • New Delhi • Mumbai • Pune Overseas Offices:8 • Addis Ababa • Dakar • Dubai • Johannesburg • London • Singapore • Washington D.C. • Yangon • Chairman and Managing Director • 5 Directors: Government of India • 3 Directors: Scheduled Banks • 2 Directors : Professionals/Experts • 1 Director nominated by RBI • 1 Director nominated by IDBI • 1 Director nominated by ECGC Appointed by Govt. of India * As per Exim Bank Act

  5. Operational Philosophy International Trade Financing Facilitating Promoting Through Research and Analysis Variety of Financing Programmes Value Added Business Advisory Services Catalyst for Financing Projects Services Products

  6. Advisory Services Knowledge Building INFORMATION SUPPLEMENTS FINANCING PROGRAMMES Range of Products & Services At All Stages of Export Business Cycle Value Based Services to Exporters Export Marketing Export Marketing Pre-Shipment Export Production Post-Shipment Export ProductDevelopment Investment Abroad Advisory Services Import Finance FINANCING, FACILITATING INDIA’S TWO WAY TRADE & INVESTMENT

  7. Financing Programmes

  8. Lines of Credit

  9. Lines of Credit Programme Lines of Credit (LOCs) Exim’s own LOCs to economically strong developing countries and regional development banks At behest of GOI, concessional LOCs to developing countries in Asia/ Africa/ Latin America/ CIS and Oceania with a long-term perspective. While Exim raises the resources and funds disbursement, GOI guarantee and provide interest equalisation support under Indian Development and Economic Assistance Scheme (IDEAS) Status of LOCs No. of LOCs operative : 187 No. of countries covered : 75 Total amount of LOCs sanctioned : US$ 10.21 billion

  10. Lines of Credit Programme A Catalyst for Trade Promotion • Enables import of Indian equipment and technology on deferred credit terms • Direct exposure on overseas borrowers • No recourse to Indian exporters • Exporters get payment on shipment • Particularly relevant for small and medium (SME) sector • Eligible items – all items permissible under Exim Policy • Project related Supplies & Services • Industrial Products & Consumer Durables • Commodities

  11. GOI-LOCs routed through Exim BankBroad Terms • Credit offered : 100% of FOB/CFR/CIF /CIP value • Credit Period : 8-20 years (inclusive of moratorium of 2-5 years) • Availability period : 48 months from the scheduled completion date for project exports 72 months from the execution of the Credit Agreement for supply contracts

  12. Origination of LOC Proposal – GOI LOCs

  13. Lines of Credit– Signing

  14. Lines of Credit– Making LOC Agreement effective

  15. Guidelines for Bidding and Procurement Procedures • The Borrower shall adopt a transparent procedure based on competitive bidding for awarding the Eligible Contract to Indian Seller. • The Borrower may conduct competitive bidding procedures in accordance with prevailing procurement laws, rules and regulations of the Borrower’s country to ensure that the award of the Eligible Contract to the Seller is made in a fair and transparent manner; the rules and regulations of the borrowing country relating to competitive bidding should be clearly defined and details of which should be provided to Exim Bank in advance. • The Borrower shall award the Eligible Contract to the Seller based on competitive bidding process. The bidding shall be restricted to Indian companies registered in India and/or incorporated/established under any law in force in India.

  16. Guidelines for Bidding and Procurement Procedures • The Borrower shall express the bid price only in Dollar (US$) • The Borrower shall widely publicise the tender inviting bids for the Eligible Contract through Websites or any other suitable media in Borrower’s country and India, including websites of the Exim Bank and Industry associations in India.

  17. Lines of Credit– Contract Approval Competitive bidding process is mandatory. Government of LOC-recipient country is expected to conduct fair and transparent selection with wide participation of Indian companies.

  18. Relationship Management Application [RMA] needs to be established between L/C Issuing Bank in Borrower’s country with Exim Bank (SWIFT: EIBIINBB). Pursuant to establishment of RMA, at the instance of the Borrower Government a Letter of Credit [L/C] covering the contract may be opened in favour of the Indian exporter stipulating Exim Bank as the advising and negotiating bank. OPENING OF A LETTER OF CREDIT (L/C)

  19. L/C will be issued by a Bank in Borrower’s Country in favour of Indian Supplier/Exporter, filling up relevant fields of the L/C as per the terms of Contract and LOC Agreement . For speedy implementation of the contract, LC needs to be settled mutually between the Importer and the Indian exporter in consultation with Exim Bank, prior to the issuance of the LC. Exim Bank will act as Negotiating Bank. Indian Supplier/Exporter will submit negotiable documents to Exim Bank, either directly or through its banker. Exim Bank makes disbursements to Indian Supplier/Exporter, once the credit compliant documents are negotiated, and debits the LOC account of the Borrower Government. OPENING OF A LETTER OF CREDIT (L/C)

  20. Lines of Credit– Disbursements and Repayments Disbursements are linked to the progress of execution of the contract.

  21. Wide Range of Projects Financed: Examples

  22. Buyer’s Credit under NEIA

  23. Buyer’s Credit under NEIA • Exim Bank has, in conjunction with ECGC, introduced a new product viz. Buyer’s Credit under Government of India’s National Export Insurance Account (NEIA). • The NEIA is a Trust, set up by Ministry of Commerce and Industry, Government of India, for providing export credit insurance cover and is administered by ECGC. • Under the Buyer’s Credit, the Bank finances project exports from India by extending credit facility to overseas sovereign governments and government owned entities on deferred credit terms, without recourse to the Indian exporter.

  24. Buyer’s Credit under NEIA: Broad Terms

  25. Buyer’s Credit under NEIA: Approval Process (8) Signing of Commercial Contract & Buyer’s Credit Agreement Overseas Project Authority Indian Exporter EXIM BANK (1) Approaches for Buyer’s Credit and Terms (2) Due Diligence (3) Seeks In-principle approval for cover and premium rates (6) For proposals exceeding USD 20 mn, approval is sought (5) On receipt of LoI/award of contract, internal approval by Exim Obtained. (7) Approval accorded for BC-NEIA (4) Conveys In-principle approval and premium Working Group: Exim Bank, RBI, ECGC, Sponsoring Bank ECGC - NEIA

  26. Buyer’s Credit under NEIA: Approval Process (1) Supplies goods / provides services Indian Exporter Overseas Project Authority (2) Submits shipping documents and Claims disbursement under payment authorization /LC (4) Funds Transfer (3) Exim Bank will negotiate documents under Letter of Credit or payment will be made to exporter against Payment Authorisations EXIM BANK (5) Advises Project Authority about disbursement and debit his Buyer’s Credit a/c with Exim Bank

  27. ECGC’s Positive List of Countries under NEIA 29

  28. 30

  29. THANK YOU Website www.eximbankindia.in

More Related