Citing the urgent need for turning the country into an export powerhouse, the Exim Bank has requested the RBI to increase its leverage ratio so that it can lend more to the exporters.
Currently, RBI allows the Exim Bank to leverage only 10 times its net-owned funds, which it wants to be hiked to at least 15 times.
"We are classified at par with a commercial bank under the RBI guidelines and can lend only 10 times our net owned funds, which restricts our capacity to help exporters,” said newly-appointed chairman and managing director Yaduvendra Mathur. He said his counterpart in China has a leverage of 77.5 times, in Korea it is 30 times, while for Canada, it is 15 times.
"We have been requesting RBI to recognise us as a special case of a development finance institution which helps the country's interests," he said, adding it has been requesting for the leverage to be increased to 15 times of the NOF. At present, the bank has to depend on the government infusions to increase its capacity to lend, he said, adding it is expecting an infusion of R1,300 crore this fiscal from the government.
“Last year, we got an infusion of R700 crore and there is a headroom of at least R5,000 crore more on the paid-up capital, after the changes in the relevant Act in 2011 which increased our paid capital to R10,000 crore in phases," he said.
Mathur said the Exim Bank aspires to be "the country's leading development bank for international cooperation" and, hence, certain regulatory changes like the hike in the leverage ratio are necessary for this.
Exim Bank has evolved from being an institution devoted to export credit, to creating export capabilities, and has now grown up to serve all stages of export business cycle, said Mathur.
“We want to be the go-to institution for any individual or company which is engaged in foreign trade and we want to compete with the best in the world. This will also serve the nation's interests," he said.