New Delhi: The Union Cabinet on Wednesday approved fresh capital infusion in the form of recapitalization of bonds in the Export-Import Bank of India (Exim Bank) to the tune of Rs. 6,000 crore and the authorized share capital of Exim Bank has been increased from Rs 10,000 crore to Rs 20,000 crore.
“The decision has been taken by the government as the Exim Bank promotes the export and import process. Under this, capital adequacy will improve,” said Union Railway Minister Piyush Goyal while briefing media persons after the Cabinet meeting, which was chaired by Prime Minister Narendra Modi.
Goyal said the equity will be infused in two tranches of Rs 4,500 crore in the financial year 2018-19 and Rs 1,500 crore during 2019-20 fiscal. “The Cabinet also approved an increase in the authorized capital of Exim Bank from Rs 10,000 crore to Rs 20,000 crore. The recapitalization bonds will be on the lines issued to public sector banks,” he said.
Exim Bank is the principal export credit agency for India. The infusion of capital into Exim Bank will enable it to augment capital adequacy and support Indian exports with enhanced ability.
The infusion will give an impetus to anticipate new initiatives like supporting Indian textile industries, likely changes in Concessional Finance Scheme (CFS), likelihood of new LoCs in future in view of India’s active foreign policy and strategic intent.
Exim Bank of India (Exim Bank) was established in 1982 under an Act of Parliament as the apex financial institution for financing, facilitating and promoting India’s international trade. The Bank primarily lends for exports from India including supporting overseas buyers and Indian suppliers for export of developmental and infrastructure projects, equipment, goods, and services from India. It is regulated by the RBI.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) also sanctioned Rs 22,594 crore to increase the capacity of Assam’s Numaligarh refinery by three times to fulfill the petroleum needs in the entire northeast region.
Goyal said the Central government has given its approval to the project for capacity expansion of Numaligarh refinery from three million metric tonnes per annum (MMTPA) to 9 MMTPA.
The project involves setting up a crude oil pipeline from Paradip to Numaligarh and product pipeline from Numaligarh to Siliguri at a cost of Rs 22,594 crore. The project is to be completed within a period of 48 months, after approval and receipt of statutory clearances.