RBI/2010-11/405
A.P. (DIR Series) Circular No. 42
February 14, 2011
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Line of Credit of USD 1 billion to
the Government of the People's Republic of Bangladesh
Export-Import Bank of India (Exim Bank) has concluded an Agreement dated
August 7, 2010 with the Government of the People's Republic of Bangladesh making
available to the latter, a Line of Credit (LOC) of USD 1 billion (USD one
billion) for financing eligible goods and services including project exports and
consultancy services in Bangladesh. The goods and services including project
exports and 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 85 per cent of the contract price shall be supplied by the seller from
India, and the remaining 15 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 1, 2011 and
the date of execution of Agreement is August 7, 2010. 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 (August 6, 2016) 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,
(G. Jaganmohan Rao)
Chief General Manager