Exim Bank wants RBI to hike its leverage ratio by 50 pc

Tags: Banking
Citing the urgent need for turning the country into an export powerhouse and the prevalent practices in competing nations, the Exim Bank has requested the Reserve Bank 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 of 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," newly-appointed chairman and managing director Yaduvendra Mathur told PTI in an interview.

He said his counterpart in China has a leverage of 77.5 times, in Korea it is 30 times, while for Canada's EDC 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 government infusions to increase its capacity to lend, he said, adding it is expecting an infusion of Rs 1,300 crore this fiscal from the government.

"Last year, we got an infusion of Rs 700 crore and there is a headroom of at least Rs 5,000 crore more on the paid-up capital front, after the changes in the relevant Act in 2011 which increased our paid capital to Rs 10,000 crore in phases," he said.

EDITORIAL OF THE DAY

  • E-wallet companies must make their revenue models sustainable

    At a time when e-wallets have come to be accepted as the new normal, HDFC chairman Aditya Puri’s contention that digital payment companies have no f

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Disequilibrium: The Phantom of a Bloody Opera

As long as the walk between subjectivity and objectivity is ...

Sachin Shridhar

Strip numbers, see truth

Indian Parliament has over has over 34 per cent of ...

Kuruvilla Pandikattu

The eternal question of science & religion

Well-known physicist Stephen Barr, author of Modern Physics and ...