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RBI/2019-20/14
A.P. (DIR Series) Circular No.1
July 11, 2019
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 100
million to the
Government of Independent State of Papua New Guinea
Export-Import Bank of India (Exim Bank) has entered into an agreement dated
January 17, 2019 with the Government of the Independent State of Papua New
Guinea for making available to the latter, a Government of India supported Line
of Credit (LoC) of USD 100 million (USD One Hundred Million only) for the
purpose of financing infrastructure related projects (USD 60 million for
Bayer-Madang road project and USD 40 million for Hoskins-Kimbe road project) in
the Independent State of Papua New Guinea. 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, works 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 June 25, 2019. Under the LoC, the
terminal utilization period is 60 months from 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 complete 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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