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RBI/2015-16/425
A.P. (DIR Series) Circular No. 76
June 16, 2016
To
All Category – I Authorised Dealer Banks
Madam/Sir,
Exim Bank's GoI supported Line of Credit of USD 2
billion to the Government of the People’s Republic of Bangladesh
Export-Import Bank of India (Exim Bank) has entered into an Agreement dated
March 09, 2016 with the Government of the People’s Republic of Bangladesh, for
making available to the latter, a Government of India supported Line of Credit
(LOC) of USD 2 billion (USD Two billion) for financing various social and
infrastructure development projects such as Power, Railways, Road
Transportation, Information and Communication Technology, Shipping, Health and
Technical Education Sectors in Bangladesh. The goods, machinery, equipment and
services including consultancy services from India for exports under this
agreement are those which are eligible for export under the Foreign Trade Policy
of the Government of India and whose purchase may be agreed to be financed by
the Exim Bank under this agreement. Out of the total credit by Exim Bank under
this agreement, the goods and services including consultancy services of the
value of at least 75% of the contract price shall be supplied by the seller from
India and the remaining 25% goods and services (other than consultancy services)
may be procured by the seller for the purpose of the eligible contract from
outside India. Further in case of projects involving civil construction, the
eligible goods upto the contract price supplied by the seller from India may be
further reduced from 75% to 65% and further reduction can be considered on a
case to case basis, provided the sourcing is not from a third country.
2. The credit agreement under the LOC is effective from May 27, 2016 and the
date of execution of agreement is March 09, 2016. Under the LOC, the terminal
utilization period is 48 months from scheduled completion date of contract in
case of project export and 72 months from execution of the Credit Agreement in
case of other supply contracts.
3. Shipments under the LOC will have to be declared on EDF/ SDF Forms as per
instructions issued by the Reserve Bank from time to time.
4. No agency commission is payable under the above LOC. However, if required,
the exporter may use his own resources or utilize balances in his Exchange
Earners’ Foreign Currency Account for payment of commission in free foreign
exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such
remittance after realization of full payment of contract value subject to
compliance with the prevailing instructions for payment of agency commission.
5. AD Category-I banks may bring the contents of this circular to the notice
of their exporter constituents and advise them to obtain full details of the
Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade
Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.
6. The Directions contained in this circular have been issued under section
10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)
and are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(A. K. Pandey)
Chief General Manager
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