Introduction / Context:
Export credit helps Indian exporters finance production and shipment of goods and services to foreign buyers. Because exports bring valuable foreign exchange into the country, India has specialised institutions to support and refinance this type of credit. This question tests knowledge of which agency in India is primarily associated with refinance of export credit rather than domestic agriculture or small industry finance.
Given Data / Assumptions:
- The focus is on refinance of export credit, not direct lending to farmers or small industries.
- The options list several important financial institutions and development banks.
- We assume basic familiarity with major Indian financial institutions and their roles.
- The term refinance means providing funds to banks that have already given export credit.
Concept / Approach:
The key concept is to match each institution with its main purpose. SIDBI focuses on small scale industries, NABARD specialises in agriculture and rural development, and the Reserve Bank of India is the central bank with broad regulatory roles. Export Import Bank of India, commonly called EXIM Bank, is the dedicated institution that supports export and import related finance and provides refinance for export credit. Eliminating institutions whose mandates are unrelated to exports leads to the correct answer.
Step-by-Step Solution:
Step 1: Identify the specific phrase export credit in the question.
Step 2: Recall that EXIM Bank was set up to provide financial assistance to exporters and importers and to promote India's international trade.
Step 3: Option d, Export Import Bank of India, directly matches this role.
Step 4: Option a, Small Industries Development Bank of India, focuses on small and medium enterprises within the country, not primarily on export credit refinance.
Step 5: Option b, National Bank for Agriculture and Rural Development, deals with agricultural and rural credit rather than export finance.
Step 6: Option c, Reserve Bank of India, provides broad regulation and some refinance schemes but is not the specialised export credit refinance agency.
Step 7: Option e refers to a historical development finance institution and is not the main export credit refinance agency.
Verification / Alternative check:
As a quick check, students can remember that the name Export Import Bank clearly signals a focus on trade flows across borders. In contrast, SIDBI and NABARD names emphasise small industries and agriculture. The central bank is usually not a sector specific refinance institution. This naming pattern strongly supports the conclusion that EXIM Bank is the institution associated with export credit refinance.
Why Other Options Are Wrong:
Option a is wrong because SIDBI deals mainly with micro, small and medium enterprises and provides them with finance and support services. Option b is incorrect since NABARD is devoted to rural and agricultural development, not export credit. Option c is incorrect because the Reserve Bank of India has a supervisory role and does not act as the primary export credit refinance agency. Option e is not the specialised export finance institution in current practice.
Common Pitfalls:
Many learners confuse refinance roles among development banks because their names can sound similar. Another pitfall is assuming that the central bank must handle all types of refinance, which is not correct. To avoid such mistakes, students should build clear associations: NABARD for agriculture, SIDBI for small industries, EXIM Bank for export import finance. Remembering these linkages helps answer a wide range of financial awareness questions quickly and accurately.
Final Answer:
The agency in India that primarily provides refinance support for export credit is the Export Import Bank of India.
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