Exporters will get enhanced support from the Export-Import Bank (Exim Bank) with the government deciding to recapitalise this specialised financial institution.

The Cabinet has on Wednesday approved a proposal to “issue recapitalisation bond to the tune of ₹6,000 crore for capital infusion” in Exim Bank. This infusion will be done in two tranches. First, the tranche of ₹4,500 crore will be completed by end-March, while the remaining amount of ₹1,500 crore will be infused during the next fiscal starting April 1. The government has also decided to double the bank’s authorised capital to ₹20,000 crore.

Briefing the media on the Cabinet decisions, Railway Minister Piyush Goyal, said the recapitalisation bonds will be on the lines of those issued to public sector banks. The infusion of capital into the bank will enable it to augment capital adequacy and support exports with enhanced ability. “Sectors such as textile will get a major boost as exporters will get enhanced line of credit,” Goyal said.

Exim Bank is the principal export credit agency in India and the infusion will give an impetus to new initiatives such as supporting textile industries, likely changes in the Concessional Finance Scheme, likelihood of new letters of credit in future in view of the country’s active foreign policy and strategic intent, he added.

Established by the Government in 1982, Exim Bank is the apex financial institution for financing, facilitating and promoting the country’s international trade. The bank primarily lends for exports, including supporting overseas buyers and Indian suppliers for export of developmental and infrastructure projects, equipment, goods and services from India.

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