RBI/2011-12/125
A.P.(DIR Series) Circular No.06
July 26, 2011
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Line of Credit of USD 5 million to
the Indo- Zambia Bank Limited
Export-Import Bank of India (Exim Bank) has concluded an Agreement dated
September 29, 2010 with the Indo-Zambia Bank Limited making available to the
latter, a Line of Credit (LOC) of USD 5 million (USD five million) for financing
eligible goods and services. The goods and 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.
- The Credit Agreement under the LOC is effective from June 29, 2011
and the date of execution of the Agreement is September 29, 2010. Under the
LOC, the last date for opening of Letters of Credit and Disbursement will be
36 months (June 28, 2014) and 42 months (December 28, 2014) from the
execution date of the Credit Agreement respectively.
- Shipments under the credit will have to be declared on GR / SDF Forms as
per instructions issued by the Reserve Bank from time to time.
- While no agency commission shall be payable in respect of exports
financed under the above line of credit, the Reserve Bank may consider, on
merits, requests for payment of commission up to a maximum of 5 per cent of
the FOB (free on board)/ CFR (cost and freight)/ CIF (cost, insurance and
freight) value in respect of goods exported and which require after sales
service. In such cases, commission will have to be paid by deduction from
the invoice of relevant shipment to agents and the reimbursable amount by
the Exim Bank to the negotiating bank will be 90 per cent of the FOB / CFR /
CIF value. Approval for the payment of commission should be obtained from
the office of the Reserve Bank of India (Foreign Exchange Department) within
whose jurisdiction the Head Office of the exporter is situated, before the
relevant shipment is effected. In other cases (i.e. exports not involving
after sales service), if required, the exporter may use his own resources or
utilize the balances of his EEFC a/c for payment of agency commission in
free foreign exchange. Authorised Dealer Category–I (AD Category –I ) banks
may allow such remittance after realization of full payment of contract
value subject to compliance of prevailing instructions on 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,
(Rashmi Fauzdar)
Chief General Manager