The bank's disbursements and sanctions increased 9 per cent and 48 per cent respectively despite the slack export growth in 1997-98. Loan sanctions during the year touched Rs 1,840 crore from Rs 1,242 crore in the previous year while disbursements increased to Rs 1,370 crore from Rs 1257 crore.

Speaking to the press, Exim Bank managing director YB Desai pointed out that 90 per cent of the loans and sanctions were in the medium term. Short-term loans by way of pre-shipment credit and so on did not witness any growth owing to the cheaper cost of the rupee fund and higher forward premiums for most part of the year, Desai said.

The proportion of direct finance extended to exporters by Exim Bank continued to outstrip that of indirectfinance through refinancing of commercial bank finance of exports, with the former amounting to more than 90 per cent of the total disbursals. Out of Rs 1,370 crore disbursed in 1997-98, a whopping Rs 1,303 was accounted for by direct financing by Exim Bank with a meagre Rs 67 crore by way of refinance to commercial banks. Desai said the increasing proportion of direct financing is due to the paradigm shift that has taken place in the banking sector during the last few years and the declining trend of re-finance will continue. The commercial banks are no longer dependent on Exim Bank and other financial institutions for funds, he said.

In 1997-98, 145 export bids worth Rs 12,174 crore covering 37 countries were approved, representing a 31 per cent increase over the previous year. The bank made commitments-in-principle aggregating Rs 1,937 crore comprising Rs 718 crore for loans and Rs 1,219 crore for guarantees in support of export bids.

Exim Bank helped secure 60 contracts worth Rs 1,895 crore covering21 countries in 1997-98 compared with 63 contracts worth Rs 2,320 crore secured the previous year. The reduction is mostly on account of lower quantum of construction contracts secured last year, Desai said. The value of turnkey contracts secured in 1997-98 amounted to Rs 1,240 crore, an increase of 44 per cent.

The bank's non-performing assets (NPAs) fell by one per cent to 6 per cent this year, mostly owing to recovery of some NPAs on account of Iraqi exposure after the government issued bonds against these exposure in March 1998.