EXIM will tap both the foreign markets and multilateral agencies to raise funds, the official said. The bank is talking to potential investors and road shows are underway.
The proposed fund would be set up “with an initial amount of USD500 million” over five years to aid MSMEs in obtaining foreign currency loans, which ultimately helps them in exports, chairman and managing director T.C.A Ranganathan said in April.
Ranganathan also said the bank has started giving partial guarantees to Indian corporates to raise foreign currency loans overseas.
A Firstpost.com article recently noted that: ”A high level of foreign currency convertible bond (FCCB) redemptions this year and high local interest rates have led several Indian companies to tap markets abroad for foreign currency loans.
Moreover, for infrastructure and many other projects, the cost of rupee loans is still very high. Even after taking into account hedging costs, foreign currency loans are still cheaper( particularly those denominated in Swiss francs) for Indian companies, which is why such loans continue to be in demand even now.”