MISCELLANEOUSCentral
Section 33 of The Export-Import Bank of India Act, 1981
- (1)Every director shall be indemnified by the Exim Bank against all losses and expenses incurred by him, in, or in relation to, the discharge of his duties, except such as are caused by his own wilful act or default.
- (2)A director shall not be responsible for any other director or for any officer or other employees of the Exim Bank or for any loss or expenses resulting to the Exim Bank from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the Exim Bank or the insolvency or wrongful act of any debtor or any person under obligation to the Exim Bank or anything done in good faith in the execution of the duties of his office or in relation thereto.
Summary
- The Exim Bank must pay for any losses or expenses a director faces while doing their job correctly.
- This protection (indemnity) covers costs related to their official duties.
- A director loses this protection if the loss was caused by their own deliberate mistake or intentional wrongdoing.
- Directors are not held responsible for the mistakes or bad actions of other directors or employees.
- They are not blamed if a borrower goes bankrupt or if the Bank takes security that turns out to have a bad title or low value.
- As long as a director acts in good faith, they are not responsible for any resulting loss to the Bank.
Practical examples
1In May 2024, Director Anil was sued by a third party because of a Bank contract he signed. Exim Bank paid for all his legal costs and the final settlement because Anil was just doing his job.
2A large company failed to pay back a 100 million rupee loan in 2025. Even though Director Priya approved the loan, she is not personally responsible for the loss because she followed all procedures in good faith.
FAQ
1. What does it mean for a director to be "indemnified"?
It means the Bank will cover their costs and protect them from financial loss arising from their work.
2. Does the Bank protect a director who steals money?
No, the indemnity does not cover losses caused by a director's own wilful act or default.
Test yourself
Q1.Under Section 33 of The Export-Import Bank of India Act, 1981, a director is NOT protected from losses caused by which of the following?
Q2.According to Section 33 of The Export-Import Bank of India Act, 1981, is one director responsible for the actions of another director?
Q3.Under Section 33 of The Export-Import Bank of India Act, 1981, who provides the indemnity for a director?
Q4.Under Section 33 of The Export-Import Bank of India Act, 1981, what is the status of a director who accepts a security with a bad title in good faith?