The Reserve Bank India (RBI) would not directly lend US dollars to the financial institutions from the foreign exchange reserves of the country. Earlier, the Export-Import Bank of India (Exim Bank) had requested the Reserve Bank to issue direct dollar credit line to meet its lending requirements. Exim Bank is facing difficulty in getting funds from overseas institutions due to the international financial crisis. Exim Bank provides funds to exporters, importers and to the Indian companies planning investments overseas.

Sources from finance ministry confirmed the request from Exim bank but RBI is not willing to open Forex reserve for financial institutions. Forex reserve is already 20 per cent lower than its end-March levels. Forex reserve was around $300 billion at the end of March this year and declined to $236.9 billion by November 21.

Exim bank has also asked to increase the borrowing limit from the European Investment Bank (EIB) to $150 million from the existing $100 million. RBI may allow Exim Bank to borrow more money from the EIB.