RESOURCES OF THE EXIM BANKCentral
Section 12 of The Export-Import Bank of India Act, 1981
Borrowings and acceptance of deposits by Exim Bank.
- (1)The Exim Bank may, for the purposes of carrying out its functions under this Act,--
- (a)issue and sell bonds and debentures with or without the guarantee of the Central Government;
- (b)borrow money from the Reserve Bank--
- (i)repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date on which the money is so borrowed against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India;
- (ii)against bills of exchange or promissory notes arising out of bona fide commercial or trade transactions and bearing two or more good signatures and maturing within five years from the date of the borrowing;
- (iii)out of the National Industrial Credit (Long Term Operations) Fund established under section 46C of the Reserve Bank of India Act, 1934 (2 of 1934) for any of the purposes specified in that section;
- (c)borrow money from such other authority, organisation or institution in India as may generally or specially be approved by the Central Government;
- (d)accept deposits repayable after the expiry of a period which shall not be less than twelve months from the date of the making of the deposit on such terms as may generally or specially be approved by the Reserve Bank.
- (2)The Central Government may, on a request being made to it by the Exim Bank, guarantee the bonds and debentures issued by that Bank as to the repayment of principal and the payment of interest at such rate as may be fixed by that Government.
Summary
- The Exim Bank can issue and sell its own bonds and debentures.
- It can borrow money from the Reserve Bank of India (RBI).
- The Central Government may guarantee the repayment of the bank's bonds.
Practical examples
1On June 1, 2026, the Exim Bank borrows money from the RBI for 60 days to cover a temporary cash shortage, using government bonds as security.
2An investor wants to place money in the Exim Bank. Under Section 12, the bank accepts the deposit on August 10, 2026, but the investor cannot withdraw it until at least August 10, 2027.
FAQ
1. How long can the bank borrow from the RBI using commercial bills?
Such borrowings are allowed for bills maturing within five years.
Test yourself
Q1.Under Section 12(1)(d) of The Export-Import Bank of India Act, 1981, what is the minimum period for a deposit?
Q2.According to Section 12(1)(b) of The Export-Import Bank of India Act, 1981, what is the time limit for a loan from the Reserve Bank when secured by stocks or securities?
Q3.Under Section 12(1)(b) of The Export-Import Bank of India Act, 1981, the bank can borrow from the RBI against commercial bills maturing within what time frame?
Q4.According to Section 12(2) of The Export-Import Bank of India Act, 1981, who fixes the interest rate for bonds that the Central Government chooses to guarantee?