The Bank’s functions are segmented into several operating groups including: * Corporate Banking Group which handles a variety of financing programmes for Export Oriented Units (EOUs), Importers, and overseas investment by Indian companies. * Project Finance / Trade Finance Group handles the entire range of export credit services such as supplier’s credit, pre-shipment credit, buyer’s credit, finance for export of projects & consultancy services, guarantees, forfeiting etc.
* Lines of Credit Group Lines of Credit (LOC) is a financing mechanism that provides a safe mode of non-recourse financing option to Indian exporters, especially to SMEs, and serves as an effective market entry tool. * Agri Business Group, to spearhead the initiative to promote and support Agri-exports. The Group handles projects and export transactions in the agricultural sector for financing. * Small and Medium Enterprises Group to the specific financing requirements of export oriented SMEs. The group handles credit proposals from SMEs under various lending programmes of the Bank.
* Export Services Group offers variety of advisory and value-added information services aimed at investment promotion * Fee based Export Marketing Services Bank offers assistance to Indian companies, to enable them establish their products in overseas markets. * Besides these, the Support Services groups, which include: Research & Planning, Corporate Finance, Loan Recovery, Internal Audit, Management Information Services, Information Technology, Legal, Human Resources Management and Corporate Affairs The objectives and functions of the Exim Bank include the following:
1. Grant of loans and advances in India solely or jointly with commercial banks to persons exporting or intending to export India goods which may include the export of turnkey projects and civil consultancy services. 2. Grant of lines credit to Governments, financial institutions and other suitable organizations in foreign countries to enable person outside India to import from India, goods including turnkey projects, civil construction contracts and other services including consultancy services. 3. Handling transaction where a mix of government credit and commercial credit for exports is involved.
4. Purchasing, discounting and negotiating export bills. 5. Selling or discounting export bills in international markets. 6. Discounting of export bills negotiated or purchased by a scheduled bank or financial institution notified by government, or granting loans and advances against such bills. 7. Providing refinance facilities to specified financial institutions against credits extended by them for specified exports or imports. 8. Granting loans and advances or issuing guarantees solely or jointly with a commercial bank for the import of goods and services from abroad.
9. Issuing confirmation/endorsing letters of credit on behalf of exporters in India, negotiating, collecting bills under letters of credit, opening letters of credit on behalf of importers of goods is services and negotiating documents received there under. 10. Buying and selling foreign exchange and performing such other functions of an authorized dealer as may necessary for the functions of an export- import bank. 11. Undertaking and financing research, surveys and techno-economic studies bearing on the promotion and development of international trade.
12. Providing technical, administrative and financial assistance to any exporter in India or any other person who intends to export goods from India for the promotion, management or expansion of any industry with a view to developing international trade. * Functions of commercial banks in foreign trade: 1. Letters of Credit Issued If you are the buyer (importer) of goods from abroad, the seller (exporter) will want to be assured of payment, and you will want to be assured that all terms and conditions of the purchase agreement are kept.
The most common instrument used for payment and shipment control is a letter of credit issued by the bank of the buyer in favor of the seller. 2. Advising Bank After the bank of the buyer approves the issuance of the letter of credit, the issued letter of credit is sent to the advising bank who establishes the authenticity of the instrument and informs the beneficiary of receipt. 3. Confirmed letter of credit The advising bank may confirm the letter of credit after checking the terms and conditions for payment by adding its own guarantee to that of the issuer.
4. Final Payment After all of the terms and conditions for shipment and quality standards have been checked via the presentation of proper documentation, the issuing bank pays the seller for the goods. ECGC Functions: 1. Provides credit Insurance covers to banks against lending risks of exporters. 2. Provides credit risk covers to Exporters against non payment risks of the overseas buyers / buyer’s country in respect of the exports made. 3. Assessment of buyers for the purpose of underwriting 4. Preparation of country reports 5.
International experience to enhance Indian capabilities 6. An ISO organization excelling in credit insurance services 7. Rated “AAA” by CRISIL for claim paying abilityExport Credit Guarantee Corporation of India Limited (ECGC). Objectives| | The Corporation has set before itself the following objectives:| 1. To encourage and facilitate globalization of India’s trade. | 2. To assist Indian exporters in managing their credit risks by providing timely information on worthiness of the buyers, bankers and the countries.
| 3. To protect the Indian exporters against unforeseen losses, which may arise due to failure of the buyer, bank or problems faced by the country of the buyer by providing cost effective credit insurance covers in the form of Policy, Factoring and Investment Insurance Services comparable to similar covers available to exporters in other countries. | 4. To facilitate availability of adequate bank finance to the Indian exporters by providing surety insurance covers for bankers at competitive rates. | 5.
To achieve improved performance in terms of profitability, financial and operational efficiency indicators and achieve optimum return on investment. | 6. To develop world class expertise in credit insurance among employees and ensure continuous innovation and achieve the highest customer satisfaction by delivering top quality service. |
7. To educate the customers by continuous publicity and effective marketing. | Functions of ECGC * provides a range of credit risk insurance covers to exporters against loss in export of goods and services, * offers guarantees to banks and financial institutions to enable exporters obtain better facilities from them, * provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan. ECGC Provides * offers insurance protection to exporters against payment risks * provides guidance in export-related activities * makes available information on different countries with its own credit ratings * makes it easy to obtain export finance from banks/financial institutions * assists exporters in recovering bad debts * information on credit-worthiness of overseas buyers|