Exim Bank extends $ 10-million LoC to Russia''s Absolut Bank
28 November 2005The Export-Import Bank of India (Exim Bank) has extended a third line of credit (LoC) to Russia to support India's exports to Russia. The five-year LoC has been extended to Absolut Bank for $10 million. The LoC agreement was signed in Moscow, Russia, on Friday, November 25, 2005, by Nikolay V Sidorov, chairman of the management board on behalf of Absolut Bank and. Vinod Goel, deputy GM on behalf of Exim Bank.
Exim Bank has earlier extended two LOCs, one for $10 million to Bank for Foreign Economic Affairs (Vnesheconombank) and another for $25 million to Bank for Foreign Trade (Vneshtorgbank) of Russia.
Under the LoC to Absolut Bank, importers based in Russia will make advance payment of 10 per cent of contract value and Exim Bank will provide credit for 90 per cent of contract value to Absolut Bank. Exim Bank will reimburse Indian exporters upon the shipment of goods and services. Credit period is up to 5 years.
Absolut Bank is a mid-sized Russian bank with increasing regional coverage and a strong market share. International Finance Corporation has a 7.5-per cent stake in the bank's equity. The bank's principal business activity is corporate banking including international trade finance and ECA backed financing, retail banking, financial markets and asset management.
Russia is India's largest trading partner in the Commonwealth of Independent States (CIS). India's main exports to Russia are drugs, pharmaceuticals and fine chemicals, readymade garments of cotton, tea, coffee, non-manufactured tobacco and processed minerals. Exim Bank's LoC to Absolut Bank will help strengthen India's trade relations with Russia, further.
Exim Bank has a number of Lines of Credit for promoting India's exports to countries in Africa, Asia, Latin America and East Europe. Exim Bank's LOCs afford a risk-free, non-recourse export financing option to Indian exporters.