MUMBAI: In an attempt to expand its resource base, Exim Bank, the agency to promote international trade, has sought the government's permission to retain its earnings instead of paying dividend. It has also asked the government for an additional capital infusion ofRs 250 crore annually over the next decade.
In a letter to the finance ministry, thecommerce secretary has made a case for higher resources for the bank to enhance its lending base in view of the institution's potential to revive and drive exports.
"Since Exim Bank is currently constrained in its onlending capacity by its overall net worthand RBI-stipulated exposure norms, we would also request that the ministry of finance may seriously consider... allowing Exim Bank to retain all its earned profit after tax so as to increase its net worth, thereby enhancing the financing of project exports from India."
Exim's return on capital to the central government for FY14 amounted to Rs 339 crore, almost half of its net profit for the year - Rs 710 crore. In the same note, the commerce secretary has also sought infusion of fresh equity capital for the bank of at least Rs 250 crore per annum over the next decade.
"This will, however, be a phased programme, given the overall fiscal budget constraints," the note said.
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