Govt gives Rs. 9,000 crore to Exim Bank as loans extended to foreign countries turn NPAs

With loans to some countries extended through Exim Bank of India being classified as “doubtful debt” in 2023-24, the Ministry of External Affairs has provided Rs 9,013.72 crore to the financial institution after it invoked Government of India (GoI) guarantee on these loans.

The Exim Bank had to invoke the guarantees after decade-plus old loans extended to some African countries turned into non-performing assets.

“Lines of Credit (LOCs) are given to other countries and some of these to African countries have turned into NPAs. They have been classified as doubtful, but not written off,” a senior government official said.

The MEA has provided a further Rs 4,383.40 crore in 2024-25 towards payment to Exim Bank towards guarantees that may be invoked against doubtful debts, indicating more such loans to countries might get classified as NPAs in the coming years.

A Ministry of External Affairs spokesperson was not available for comment.

Officials said government-supported LOCs to countries of Asia (excluding Bangladesh, Nepal, Bhutan) Africa, Commonwealth of Independent States region and Latin American region are extended under the Indian Development and Economic Assistance Scheme.

Once guarantees are invoked by a financial institution or a public sector undertaking, the funds are paid out of the Guarantee Redemption Fund established in the Public Account of India since 1999-2000.