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.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The big challenge before India now is to figure out the real China

    Sino-Indian relations come under a rather special category, as far as ties between two neighbouring countries go.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

Risks and effects of climate change

Research has shown that several people are aware of climate ...

Parvez Imam

Why we all have blood on our hands

What does the Jammu and Kashmir flood make us think? ...

Dharmendra Khandal

The peculiar possibilities of animal poop

You can tell a lot about an animal by its ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture