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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