The Export-Import Bank of India Act, 1981

Summary of The Export-Import Bank of India Act, 1981
Key Points
1. Act Title and Enactment
• Act Name: Export-Import Bank of India Act, 1981
• Enactment: By Parliament in the Thirty-second Year of the Republic of India
• Commencement: Dates appointed by the Central Government through notifications (e.g., 1st January 1982, for most provisions, and 1st March 1982, for Section 26)
2. Purpose
• Establish the Export-Import Bank of India (Exim Bank)
• Provide financial assistance to exporters and importers
• Function as the principal financial institution for coordinating export and import financing
• Promote the country's international trade
3. Establishment and Structure
• Exim Bank: A corporation with perpetual succession and a common seal
• Head Office: Initially at Bombay (now Mumbai), potentially relocatable by Central Government notification
• Offices/Branches: Can be established in or outside India as necessary
4. Capital
• Authorised Capital: Ten thousand crores of rupees (subject to increase by the Central Government)
• Issued Capital: Wholly subscribed by the Central Government
5. Business Operations
• Primary:
• Grant loans and advances for export/import
• Coordinate financing institutions for export/import
• Additional Businesses (non-exhaustive list from Section 10):
• Refinance to scheduled banks
• Underwriting stocks/shares for export/import companies
• Issuing bid bonds/guarantees
• Discounting bills of exchange for export/import
• Letters of credit
• Lines of credit to foreign governments/institutions
• Financing joint ventures and equipment leases
• Foreign exchange dealings
• Research and development for international trade
• Technical/administrative/financial assistance for export/import
6. Resources
• Loans from Central Government
• Borrowings:
• Issue bonds/debentures (with or without Central Government guarantee)
• Borrow from the Reserve Bank of India
• Borrow from approved authorities/institutions in India
• Accept deposits (repayable after 12 months)
• Foreign Currency Loans: With previous consent of the Central Government
• Grants/Donations: Can be received from any source
7. Export Development Fund (EDF)
• Establishment: By Exim Bank, as notified by the Central Government
• Credits to EDF:
• Loans, gifts, grants, etc.
• Repayments from EDF-funded loans
• Income from investments
• Interest/income from EDF applications
• Utilisation:
• For specific loan/advance arrangements under Section 10, with Central Government approval
• Prior approval required, ensuring no ordinary financial institution would provide the facility
• Debits to EDF:
• Disbursed/spent amounts
• Liability discharges for EDF loans
• Investment losses
• Administrative expenses determined by the Board
• Accounts and Audit:
• Prepared in a prescribed form
• Audited by Central Government-appointed auditors
• Reports to be laid before Parliament
8. Miscellaneous
• Definitions: Provided for key terms (e.g., Board, Exim Bank, Export, Import, Goods, Services)
• Amendments: Reference to an amendment (e.g., by Act 11 of 2012)

Legislative History:

The Export-Import Bank of India Act, 1981

● Act Title - The Export-Import Bank of India Act, 1981

● Act Number / Year - 28 of 1981

● Act ID (India Code) - 198128

● Presidential Assent Date - September 11, 1981

● Enforcement Date - January 1, 1982

● Nodal Ministry - Ministry of Finance

Precedent & Historical Rationale

● Specialized Apex Financial Institution for International Trade - Prior to 1981, international trade financing and export credit operations were managed directly by the Industrial Development Bank of India (IDBI) through its International Finance Wing, alongside commercial banks. As India’s foreign trade expanded, there arose an urgent structural need for a dedicated, apex export credit agency to support cross-border trade, project exports, and joint ventures.

● Establishment of Exim Bank of India - Formulated to establish the Export-Import Bank of India (Exim Bank) as a principal statutory financial institution. The Act empowered the bank to finance, facilitate, and promote India’s international trade, provide lines of credit to foreign governments and financial institutions, refinance commercial banks for export-import transactions, and offer advisory services to exporters to enhance global competitiveness.

Parliamentary Trajectory & Enactment

● Formulation - Introduced by the Union Ministry of Finance to provide a specialized statutory foundation and capital base for international trade financing, transferring the international finance operations of IDBI to the newly created Exim Bank.

● Parliamentary Passage - Debated and passed by both Houses of Parliament (Seventh Lok Sabha and Rajya Sabha) during the monsoon session in August–September 1981.

● Presidential Assent - Received Presidential Assent on September 11, 1981.

● Enforcement - Enforced on January 1, 1982.

Source - Official Record of Parliament, India Code, and Ministry of Finance .