India's lower house of parliament has approved a bill to increase the authorised capital of Export Import Bank of India (Exim Bank) from the equivalent of around US$380 million to about US$1.9 billion.

The increase aims improve the availability of letters of credit (L/Cs) to Indian exporters.

Export boost

According to India's minister of state for finance, Namo Narain Meena, the amendment of the Exim Bank Act 1981, "will help the Exim Bank to promote its objective of raising exports" and "provide more L/Cs to exporters."

The amendment also allows the government to raise Exim Bank's authorised capital in the future through a simple notification.

Budget measures

The new legislation does not instantly raise Exim Bank's capital. Rather, it allows the bank's capital to be increased by measures introduced in future budgets.

Exim Bank, which was established in 1981, currently has a net worth of around US$1 billion.

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