RBI/2010-11/426
A.P. (DIR Series) Circular No. 44
March 15, 2011
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Line of Credit of USD 50 million to
the Government of the Republic of Malawi
Export-Import Bank of India (Exim Bank) has concluded an Agreement dated
February 1, 2011 with the Government of the Republic of Malawi making available
to the latter, a Line of Credit (LOC) of USD 50 million (USD fifty million) for
financing eligible goods and services, machinery and equipment including
consultancy services for financing (i) Cotton Processing Facilities (USD 20
million), (ii) Green Belt Initiative (USD 15 million), and (iii) One Village One
Product Project (USD 15 million) in Malawi. The goods, services, machinery and
equipment 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 per cent of the contract price shall be supplied by the
seller from India, and the remaining 25 per cent goods and services (other than
consultancy services) may be procured by the seller for the purpose of Eligible
Contract from outside India.
- The Credit Agreement under the LOC is effective from February 23,
2011 and the date of execution of Agreement is February 1, 2011. Under the
LOC, the last date for opening of Letters of Credit and Disbursement will be
48 months from the scheduled completion date(s) of contract(s) in the case
of project exports and 72 months (January 31, 2017) from the execution date
of the Credit Agreement in the case of supply contracts.
- Shipments under the LOC will have to be declared on GR / SDF Forms as per
instructions issued by the Reserve Bank from time to time.
- 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.
- 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.
- The directions contained in this circular have been issued under sections
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,
(Meena Hemchandra)
Chief General Manager-in-Charge