Date: 2022-05-05Category: Not ApplicableState: Union GovernmentCountry: India
Exim Bank's Government of India supported additional Line of Credit (LoC) of USD 190 million to the SBM (Mauritius) Infrastructure Development Company Ltd
Executive Summary:
The Reserve Bank of India (RBI) issued a circular regarding an additional Government of India-supported Line of Credit (LoC) of USD 190 million from Exim Bank to SBM Mauritius Infrastructure Development Company Ltd (SBMIDCL). This LoC will finance SBMIDCL's participation in the Metro Express Project and other infrastructure projects in Mauritius. The agreement is effective from April 18, 2022, with a terminal utilization period of 60 months from the project's scheduled completion date.
Key Points / Main Content:
* **Line of Credit Details:**
* Exim Bank has an agreement with SBMIDCL for a USD 190 million LoC.
* This supplements an existing USD 500 million credit line to SBMIDCL.
* The LoC will finance SBMIDCL's participation in public sector entities through Redeemable Preference Shares.
* **Eligibility & Conditions:**
* Financing is allowed for the export of eligible goods and services from India, as defined under the agreement and the Foreign Trade Policy of the Government of India.
* At least 75% of the contract price for goods and services must be supplied by the seller from India.
* Up to 25% of goods and services may be procured from outside India.
* Indian content requirement for the Metro Express Project shall be 30% of the contract price.
* **Operational Guidelines:**
* The LoC agreement is effective from April 18, 2022.
* The terminal utilization period is 60 months from the project's scheduled completion date.
* Shipments under the LoC must be declared in the Export Declaration Form.
* No agency commission is payable under the LoC.
* Exporters may use their own resources or Exchange Earners Foreign Currency Account balances for commission payments.
* **Regulatory Information:**
* The directions are issued under the Foreign Exchange Management Act (FEMA), 1999.
Impact Analysis:
* **Authorised Dealer (AD) Category I Banks:**
* Impact: Need to understand the details of the LoC and facilitate transactions related to it.
* Action Required: Inform exporter constituents about the LoC and advise them to obtain details from Exim Bank.
* **Indian Exporters:**
* Impact: Opportunity to finance exports to Mauritius under the LoC.
* Action Required: Obtain details of the LoC from Exim Bank to leverage the financing options for eligible projects.
* **SBM Mauritius Infrastructure Development Company Ltd (SBMIDCL):**
* Impact: Receives additional funding for infrastructure projects in Mauritius.
* Action Required: Utilize the LoC as per the terms and conditions of the agreement with Exim Bank.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
Exim Bank: Export-Import Bank of India, a financial institution that facilitates India's international trade.
SBM Mauritius Infrastructure Development Company Ltd: A Mauritius-based company receiving a Line of Credit from Exim Bank for infrastructure projects.
Government of India: The governing body of the Republic of India, which supports the Line of Credit.
Line of Credit: A financial instrument provided by Exim Bank to SBM Mauritius Infrastructure Development Company Ltd.
Metro Express Project: An infrastructure project in Mauritius being financed through the Line of Credit.
Mauritius: An island nation in the Indian Ocean, where the infrastructure projects are located.
Foreign Exchange Management Act (FEMA), 1999: An act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2022-2023/47
A.P. (DIR Series) Circular No.02 May 05, 2022
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported additional Line of Credit (LoC) of
USD 190 million to the SBM (Mauritius) Infrastructure Development Company Ltd
Export-Import Bank of India (Exim Bank) has entered into an agreement dated January
06, 2022 with the SBM (Mauritius) Infrastructure Development Company Ltd (SBMIDCL),
for making available to the latter, Government of India supported Line of Credit (LoC) of
USD 190 million (USD One Hundred and Ninety Million Only) for the purpose of financing
its participation through Redeemable Preference Shares in public sector entities for
implementing the ongoing Metro Express Project and other infrastructure projects in
Mauritius. The Credit facility is an additional tranche to the existing Credit of USD 500
million (USD Five Hundred Million) which has been extended to SBMIDCL on the terms
and conditions contained in the Dollar Credit Line Agreement dated May 27, 2017. 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 the 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. Provided, however, Indian content requirement for the Metro Express
Project shall be 30% of the contract price.2. The Agreement under the LoC is effective from April 18, 2022. 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 (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
(Vivek Srivastava)
Chief General Manager