The government had provided for Rs 500 crore towards capital infusion in the Exim Bank in the budget for this fiscal.
The Union Cabinet has approved the recapitalisation of Export Import Bank of India (Exim Bank). The meeting was chaired by the Prime Minister Narendra Modi. The infusion is aimed to help the bank expand its business.
The government had provided for Rs 500 crore towards capital infusion in the Exim Bank in the budget for this fiscal. The government had infused Rs 500 crore in Exim Bank last financial year.
As per official statement, recapitalisation bonds to the tune of Rs 6,000 crore by the Government of India will be issued for the purpose. The equity will be infused in two tranches of Rs 4,500 crore in FY 2018-19 and Rs 1,500 crore in FY 2019-20 respectively.
The Cabinet also approved an increase in the authorised capital of Exim Bank from Rs 10,000 crore to Rs 20,000 crore.
The recapitalisation bonds will be on the lines issued to Public Sector Banks.
Exim Bank is the principal export credit agency for India and, therefore, 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," the statement said.