Exim Bank has sought additional capital from the Centre and urged Reserve Bank of India (RBI) to enhance its leverage ratio further to be able to increase its headroom to finance export projects, chairman and managing director Yaduvendra Mathur said on Wednesday.
Mathur said the bank has sought Rs 2,500-crore fund infusion in the next financial year which would help it increase its equity base and allow the state-owned lender to offer more credit to the export sector.
RBI had recently increased the scope of leverage up to 11 times of its equity capital and reserves from 10 times. A further increase in leverage ratio would allow the bank to extend more credit flow for the exporters.
“We have made a request to the government to inject more equity in Exim Bank. They have injected Rs 1,300 crore this year,” Mathur told reporters on the sidelines of the Banking Conclave of Ficci. Following the infusion, the equity base of the bank has increased to Rs 5,000 crore.
“The leverage ratio should be enhanced from 11 to 15. The other request is additional Rs 2,500 crore in the next financial year and another Rs 2,500 crore after that,” the CMD said.
According to him, the additional capital could help finance project exports worth $8 billion secured by Indian companies. But, due to lack of leveraging room of both Exim Bank and Export credit Gurantee Corporation (ECGC), the bank was constrained to finance projects due to lack of insurance cover.