Section 4 of The Export-Import Bank of India Act, 1981
1[(1) The authorised capital of the Exim Bank shall be ten thousand crores of rupees: Provided that the Central Government may, by notification, increase the said capital up to an amount that it may deem necessary from time to time.]
- (2)The issued capital of the Exim Bank shall be wholly subscribed by the Central Government.
Summary
- Authorized capital is the maximum amount of money the bank is legally allowed to have through its shares.
- The Central Government has the power to increase this capital limit whenever it deems necessary.
- To increase the capital, the government must issue an official notification.
- The issued capital is the part of the capital that is actually given out and used.
- Only the Central Government is allowed to subscribe to (buy) the bank's issued capital.
Practical examples
FAQ
1. Who has the power to raise the bank's capital limit?
The Central Government can increase the capital through a notification.
2. Can a private bank buy shares in the Exim Bank?
No, the issued capital must be wholly subscribed by the Central Government.
Test yourself
Q1.Under Section 4 of The Export-Import Bank of India Act, 1981, what is the specific amount of the bank's authorized capital?
Q2.Under Section 4 of The Export-Import Bank of India Act, 1981, who is responsible for providing all the issued capital of the bank?
Q3.According to Section 4 of The Export-Import Bank of India Act, 1981, how can the authorized capital be increased?
Q4.Under Section 4 of The Export-Import Bank of India Act, 1981, what must the Central Government do to legally raise the capital amount?