Section 11 of The Export-Import Bank of India Act, 1981
Loans by Central Government.
The Central Government may, after due appropriation made by Parliament by law in this behalf, advance to the Exim Bank--
- (a)a loan of twenty crores of rupees at a rate of interest of five and a quarter per cent. per annum repayable in fifteen equal annual instalments, commencing on the expiry of a period of fifteen years from the date of receipt of the loan; and
- (b)such further sums of money by way of loan on such terms and conditions as may be agreed upon: Provided that the Central Government may, on a request being made to it by the Exim Bank, increase the number of instalments or alter the amount of any instalment or vary the date on which any instalment is payable under clause (a).
Summary
- The Central Government can provide loans to the bank to fund its operations, but only after Parliament passes an appropriation law (a law that formally sets aside government funds for a specific purpose).
- The initial loan is a fixed amount of twenty crores of rupees (two hundred million rupees) at a set interest rate of five and a quarter per cent per year.
- This initial loan must be repaid in fifteen equal annual installments, which only begin fifteen years after the bank receives the money.
- The Central Government can also provide additional loans to the bank on any terms and conditions that both parties agree upon.
- If the bank submits a request, the Central Government has the authority to modify the repayment terms of the initial loan by changing the number, amount, or payment dates of the installments.
Practical examples
FAQ
1. Does the Central Government need parliamentary approval to lend money to the Exim Bank under Section 11 of The Export-Import Bank of India Act, 1981?
Yes, under Section 11 of The Export-Import Bank of India Act, 1981, any advance or loan made by the Central Government to the bank can only be done after Parliament has passed an appropriation law (a law that formally sets aside government funds for a specific purpose).
2. What are the interest rate and repayment terms for the initial twenty-crore loan under Section 11 of The Export-Import Bank of India Act, 1981?
Under Section 11 of The Export-Import Bank of India Act, 1981, the initial loan of twenty crores of rupees (two hundred million rupees) carries an interest rate of five and a quarter per cent per year and must be paid back in fifteen equal annual installments starting fifteen years after the bank receives the loan.
3. Can the repayment schedule of the initial loan be changed under Section 11 of The Export-Import Bank of India Act, 1981?
Yes, under Section 11 of The Export-Import Bank of India Act, 1981, if the bank submits a request, the Central Government has the power to increase the number of repayment installments, alter the amount of any installment, or change the dates on which they are due.
4. Can the Central Government lend more than twenty crores to the bank under Section 11 of The Export-Import Bank of India Act, 1981?
Yes, under Section 11 of The Export-Import Bank of India Act, 1981, the Central Government can advance further sums of money as loans to the bank on any terms and conditions that both parties agree upon.
Test yourself
Q1.Under Section 11 of The Export-Import Bank of India Act, 1981, what is a necessary legal prerequisite before the Central Government can advance any loan to the bank?
Q2.Under Section 11 of The Export-Import Bank of India Act, 1981, when does the bank actually have to start paying back the principal of its initial twenty-crore loan?
Q3.If the bank faces temporary cash flow difficulties and cannot meet a scheduled installment payment for its initial loan, what relief can it seek under Section 11 of The Export-Import Bank of India Act, 1981?
Q4.Under Section 11 of The Export-Import Bank of India Act, 1981, how are the terms, conditions, and amounts of any additional loans beyond the initial twenty-crore loan determined?