Mumbai: India's private lenders ICICI Bank and Yes Bank on Thursday signed a collaborative deal with the Export -Import Bank of Malaysia Berhad (Exim Bank) to enhance trade, especially for palm oil, between the two countries.
Through this deal, Exim Bank, a development financial institution wholly-owned by Malaysia's Ministry of Finance, will provide credit lines to ICICI Bank and Yes Bank to facilitate imports of goods from the South-East Asian nation.
"We have entered into a USD 100 million master facility agreement in order to facilitate ongoing trade and finance transactions between Yea Bank and its importing customers.
"This facility will play an active role towards further augmenting trade flows in the Indo-Malaysia corridor by arranging overseas trade credit for Indian importers," Yes Bank said in a statement here.
Through the tie-up, Yes Bank and Exim Bank will be able to leverage their combined expertise, local knowledge and corporate relationships to open up trade finance opportunities for their respective clients.
The facility will be available by means of line of credit refinancing, buyers credit financing, import collection and/or open account transaction financing for Malaysia based trade transactions.
"This alliance will further strengthen our commitment towards the Indo-Malaysia business corridor. Bilateral trade in this jurisdiction has grown to USD 10 billion in 2010-11 and is expected to significantly increase with the signing of the Comprehensive Economic Cooperation Agreement (CECA) last year," Yes Bank Managing Director and CEO Rana Kapoor said.
This is a first-of-its-kind trade finance facility extended by the Malaysian Exim Bank to banks in India, which will further augment the trade and investment ties between the two countries, he said.
Despite the economic slowdown last year, India was regarded as one of the top five fastest growing export destinations for Malaysia with export figures recorded at USD 7.5 billion in 2011, a 33 percent jump from 2010.
Exim Bank can partake in increasing the movement of goods and services between the two countries, Exim Bank Managing Director Dato Adissadikin Ali said.
"Malaysian and Indian companies can collaborate in several areas, particularly in value-added palm derivatives such as oleochemicals, pharmaceuticals, processed foods, speciality products and consumer brands.
"These efforts will spur the growth of the India oils and fats industries and enhance trade between the two countries," Malaysian Plantation Industries & Commodities Minister Tan Sri Bernard Dompok said on the sidelines of a seminar here today.
Malaysia's export of palm oil products to India in 2012 is expected to exceed the 1.82 million tonne mark recorded last year, Dompok said.