NEW DELHI: The Export-Import Bank of India (Exim Bank) plans to raise USD 3.8 billion through foreign currency fund mop-up in the current fiscal year under its global medium-term note (GMTN) programme, a top official said.
Being a policy bank, fully owned by the union government, the bank also has a budgeted allocation of Rs 1,500 crore for the current fiscal year.
"For FY23, Exim Bank has a budgeted allocation of Rs 1,500 crore by the government. Typically that would be required by the bank for its growth as well as to maintain the required capital adequacy ratio," Harsha Bangari, Managing Director, Exim Bank said.
She said during the current fiscal year 2022-23, Exim Bank will request the government to provide from the budgeted capital depending on the requirement.
"As regards our requirement, we are a financial institution so we will have a capital mix of equity and debt. For the year FY23, we have a foreign currency resource raising programme of about USD 3.8 billion. This proposed USD 3.8 billion would be across tenors. It's not really long-term funding, it will be short-term funding as well. The bank has a GMTN programme where it can access international capital (market). We issue bonds such as foreign currency bonds," Bangari said.
This will be under the bank's USD 10 billion GMTN programme. A medium-term note (MTN) is a bond that typically carries a maturity period of five to 10 years. This kind of bond issuance can be continuously offered by a company to investors to meet its constant cash flow requirements.
The coupon rates on MTNs are higher than those on short-term notes. In addition to that, the bank also borrows money from the market. It can either be in the form of syndicated loan arrangement or by way of bilateral arrangement, she added.
Besides, Exim Bank also has very strong relationships with the multilateral funding agencies, Bangari said. "In the current financial year, we have already borrowed funds of USD 50 million from Japan Bank of International Cooperation (JBIC)," the official said further.
In May this year, Exim Bank inked a USD 100 million loan agreement with JBIC along with three Japanese financial institutions.
Established in 1982, Exim Bank promotes India's international trade and investment by offering Indian companies a comprehensive range of products and services with a view to enhancing their international competitiveness.
Exim Bank supports Indian exporting companies, especially medium-sized enterprises, in their globalisation efforts through a variety of lending programmes.
In 2020-21, the bank approved loans aggregating Rs 36,521 crore under various lending programmes, as against Rs 40,255 crore during 2019-20.
Besides, it sanctioned non-funded facilities aggregating Rs 6,422 crore, as against Rs 7,139 crore in FY 2019-20, comprising project guarantees, financial guarantees and letters of credit.