The Export-Import Bank of India Act, 1981 (Act No. 28 of 1981) dated 11th September, 1981 was enacted in the year 32nd year of Republic of India by Parliament, with the view to establish Export-Import Bank of India (EXIM Bank) to make financial provisions for exporters and importers resultantly, Export-Import Bank of India being the premier export finance institution of the country, set up in 1982. The Act also specks for Bank should serve as principal financial institution co-ordinating the functioning of those institutions engaged in financing export and import of goods and services with a view to promote International Trade of Country. The Act under it first Section provides for its short title, commencement and the most important its extension over whole of India.
The Act under its nine chapters makes different provisions as to establishment and management of Export-Import Bank of India and also for Export and General Funds, etc. The Section 2 of the Act enlisted various important definitions of terms which have been used under the Act while describing different provisions. Some of the examples of such terms defined under the Act are, Exim bank, board, development bank, etc. And with this provision the first Chapter of the Act is closed.
The Second chapter provided under the Act dealt with Export-Import banks of India’s establishment, incorporation, etc. The Section 3 of the Act require the Central Government as to establishment of Corporation which is named Export-Import Bank of India (Exim Bank). Such bank is to be a body corporate like registered company and should have seal with power. Further, such Exim Bank can also acquire, hole and transfer the property and can also enter the contract under its name. Further sub sections to this Section deal with location of officer of such Bank, which is to be at Bombay (Mumbai) or at any place specified by Central Government and such Bank can also establish branches or agencies.
The Exim Bank as per Section 4 of the Act established with authorized capital of Rupees 10,000 Crores which is to increased from time to time by Central Government. Subsequently, in the year 1999, the authorised capital of the EXIM Bank was increased to Rupees 1000 Crores by Central Government also in the year 2007 it is increased to Rupees 2000 Crores.
The most important provisions as to management of Exim Bank are described under Chapter III of the Act, wherein Section 5 of the Act clears that, the Board of Directors should manage the Exim Bank and its superintendence, direction and management of its affairs, business should also be vested with such Board exercising all powers which Exim Bank needed to exercise.
Further Section i.e. Section 6 of the Act provides constitution of such Board of Exim Bank. Such Board should have the authorities including Chairman and Managing director, Directors (whole time), another Directors to be nominated from different sectors including nomination of Reserve Bank, Development Bank, etc. and such other Directors not more than 12 nominated by Central Government. Further Sub Section deals with terms of offices of such authorities, terminations, etc. of such authorities. The Board so constituted under previous provision can under Section 7 of the Act constitute Committees to have meetings regarding discussion on transaction of business. All these Directors and other members of Committee entitled to prescribed fees and allowances under Section 8 of the Act.
The next important Chapter dealing with business of the Exim Bank is Chapter IV of the Act, wherein Section 10 specifically says about business of Exim Bank is to grant of loans and advances either inside or outside India or either by itself or in participation with any other bank for export – import. Further, a list functional areas is provided under Sub Section (2) of the Section 10, where Exim Bank can act upon.
Chapter V of the Act is also of similar importance as it provides for resources of Exim Bank, including Section 11 dealing with loan from Central Government to Exim Bank of fixed sum of Rupees 20 Crores at the certain rate of interests and also other loans. Such loan from Central Government is to be repaid within such installments provided under the Act and even such number of installments could be increased by Central Government. Moreover, Exim bank can issue Bonds and Debentures irrespective of guarantee of the Central Government. It can also borrow money from Reserve Bank, from other authorities, organizations or institutions in India.
The Chapter VI of the Act makes provisions for export of development fund, especially, under Section 15 of the Act which deals with establishment and development of such Fund. The Section 16 of the Act speaks for credits to such Fund from the amounts received by way of loans, gifts, grants, etc. from Government. Even loans granted or advancement of other facilities out of such Fund, on its repayments should also be credited to such Fund and also other sources provided which are to be credited to such Fund under this provision. Similarly, Section 18 of the Act provides for amounts enlisted under this Section which are to be debited to the Fund. Further, Section 17 deals with utilization of such Fund in respect of matters provided under Section 10 of the Act with the approval of Central Government. Section 19 of the Act dealt with auditing, accounting, etc. of such Fund.
The another important Chapter is Chapter VII of the Act makes provisions as to General Fund which is constituted out of the Export Development Fund. And the Chapter VIII of the Act under Section 26 provides for transfer of part of business relating to export financing, to the Exim Bank. The Staff of Exim Bank, Delegation of powers to such staff, Returns and other relevant matters are explained under final Chapter (Chapter IX) of the Act under the head of miscellaneous provisions.
The Export-Import Bank of India Act, 1981 was amended in the years 1985, 1988, 1998, 1999, 2005 and 2006. Recently, in the year 2011 The Export-Import Bank Of India (Amendment) Bill, 2011 was introduced in the House of People with certain amendment to The original Act of 1981.
by Faim Khalilkhan Pathan