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RBI/2017-18/149
A.P. (DIR Series) Circular No.21
April 5th, 2018
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 4.50 billion to the Government of the People’s Republic of Bangladesh
Export-Import Bank of India (Exim Bank) has entered into an agreement dated
October 04, 2017 with the Government of the People’s Republic of Bangladesh (the
borrower) for making available to the latter, a Government of India supported
Line of Credit (LOC) of USD 4.50 billion (USD Four Billion and Five Hundred
Million only) for financing various social and infrastructure developmental
projects in the borrower’s country and consultancy services to be exported from
India to the borrower’s country. Under the arrangement, financing export of
eligible goods and services from India would be allowed 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. The
goods include plant, machinery and equipment and services include consultancy
services. Out of the total credit by Exim Bank under this agreement, goods and
services of the value of at least 75 per cent of the contract price shall be
supplied by the seller from India and the remaining 25 per cent of goods and
services may be procured by the seller for the purpose of the eligible contract
from outside India; Provided that in case of projects involving civil
construction, the eligible goods upto the contract price to be supplied by the
seller from Indian may be further reduced from 75 percent to 65 percent and
further reduction can be considered on a case to case basis by EXIM Bank,
provided the sourcing is not from a third country.
2. The Agreement under the LoC is effective from February 26, 2018. Under the
LoC, the terminal utilization period is 60 months after the scheduled completion
date of the respective project.
3. Shipments under the LoC will have to
be declared on Export Declaration Form as per instructions issued by Reserve
Bank from time to time.
4. No agency commission is payable for export
under the above LoC. However, if required, the exporter may use its own
resources or utilize balances in its Exchange Earners’ Foreign Currency Account
for payment of commission in free foreign exchange. Authorised Dealer Category-
I (AD Category- I) banks may allow such remittance after realization of full
eligible value of export subject to compliance with the extant 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 LoC from the Exim Bank’s office at
Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005
or from their website 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
R K Moolchandani
Chief General Manager
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