RBI/2018-19/73
A.P. (DIR Series) Circular No.12
November 15, 2018
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 2.5 million to the
Government of Madagascar
Export-Import Bank of India (Exim Bank) has entered into an agreement dated May 5, 2017 and amendatory
agreement dated February 5, 2018 with the Government of Madagascar for making available to the latter, a Government of India supported
Line of Credit (LoC) of USD 2.5 million (USD Two million and five hundred thousand only) for the purpose of financing the completion of
unfinished fertilizer plant project covered under an earlier credit of USD 25 million in Madagascar. Under the arrangement, financing
of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being 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, 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.
2. The Agreement under the LoC is effective from October 16, 2018. Under the LoC, the terminal utilization period is 60 months after
the scheduled completion date of the project.
3. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the 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 his own resources or
utilize balances in his 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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