The Union Cabinet headed by Prime Minister Narendra Modi has approved a capital infusion of Rs 6,000 crore in state-owned Export-Import Bank of India (Exim) to expand its business.
1. The government would issue recapitalization bonds to the tune of Rs 6,000 crore for capital infusion of Exim Bank.
2. The government has also approved an increase in the bank’s authorized capital from Rs 10,000 crore to Rs 20,000 crore.
3. The capital infusion would take place in two tranches of Rs 4,500 crore in 2018-19 and Rs 1,500 crore in 2019-20 respectively.
The capital infusion and increase in authorized capital give an impetus to new initiatives such as supporting Indian textile industries, likely changes in the Concessional Finance Scheme, the likelihood of new letters of credit in future in view of the country’s active foreign policy and strategic intent. This will have a positive impact on increasing the exports of India.