The US-Israel war on Iran and the subsequent closure of the key Strait of Hormuz has increased shipping costs, disrupted logistics and affected exporter sentiment.
Also read: Uday Kotak warns India yet to feel heat of Gulf warHowever, the bank will remain cautious on the timing of any fresh borrowing, she said, without specifying when the fundraise would be carried out.
The wholly state-owned EXIM Bank, which provides export financing and backs loans granted by commercial lenders to buyers of Indian goods, expects to tap the domestic market for around ₹660 billion through instruments such as bonds, certificates of deposit and loans, according to Bangari.It will raise about $3.5 billion from overseas markets via bilateral and syndicated loans, she added.
The planned borrowing is higher than the ₹860 billion the bank raised in the previous financial year.
Impact of West Asia crisis
The bank, which also extends lines of credit to governments and institutions in developing countries, particularly in Africa, Asia and Latin America, expects loan growth to moderate to 10% in fiscal 2027, from 12% last year, Bangari said, due to the West Asia crisis.”I have a really robust pipeline and I’m confident that it will be disbursed in the current year,” said Bangari.
However, the pace of contract imports for Indian firms could slow if the uncertainty persists for longer, she added.
The bank’s West Asia and North Africa exposure stands at around ₹57 billion of the overall exposure of ₹3.5 trillion, Bangari said, adding that the bank has been conducting a detailed assessment of the potential impact of the war on its loan book.
