**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on November 11, 2021, announces a Government of India-supported Line of Credit (LoC) of USD 10.40 million from the Export-Import Bank of India (Exim Bank) to the Government of the Kingdom of Eswatini (Swaziland). The LoC agreement, effective from September 27, 2021, is intended to finance the construction of a Disaster Recovery Site in Eswatini, with the preparation and appraisal of a Detailed Project Report (DPR) capped at 1% of the credit.
Under the LoC, the financing of eligible goods and services exported from India is permitted, provided they comply with the Foreign Trade Policy of the Government of India and are approved for financing by Exim Bank. A minimum of 75% of the contract price for goods, works, and services must be supplied by the seller from India, while the remaining 25% can be procured from outside India. The terminal utilization period for the LoC is 60 months after the scheduled completion date of the project.
Shipments under the LoC must be declared in the Export Declaration Form as per RBI guidelines. No agency commission is payable for exports under this LoC; however, exporters can use their own resources or Exchange Earners Foreign Currency Account balances for commission payments in free foreign exchange, subject to AD Category-I bank approval and compliance with existing instructions.
Authorised Dealer (AD) Category-I banks are instructed to inform their exporter clients about the LoC and advise them to obtain detailed information from 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.
This circular is issued under the Foreign Exchange Management Act (FEMA), 1999, and does not override any other legal requirements.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Exim Bank: Export-Import Bank of India, a financial institution that facilitates and promotes foreign trade of India.
Government of the Kingdom of Eswatini: The governing body of Eswatini, formerly known as Swaziland.
Line of Credit LoC: A credit facility extended by Exim Bank to the Government of the Kingdom of Eswatini, supported by the Government of India.
Foreign Trade Policy of the Government of India: A set of guidelines and regulations governing the import and export of goods and services in India.
Mumbai, Maharashtra: A city in India where Exim Bank's office is 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.
R. S. Amar: Chief General Manager at Reserve Bank of India.
भारतीय �रज़वर् ब�क
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2021-2022/122
A.P. (DIR Series) Circular No.17 November 11, 2021
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit (LoC) of
USD 10.40 million to the Government of the Kingdom of Eswatini (Swaziland)
Export-Import Bank of India (Exim Bank) has entered into an agreement dated February
01, 2021 with the Government of the Kingdom of Eswatini (Swaziland), for making
available to the latter, Government of India supported Line of Credit (LoC) of USD 10.40
million (USD Ten million and four hundred thousand only) for the purpose of financing
construction of a Disaster Recovery Site, subject to preparation and appraisal of Detailed
Project Report (DPR) at a cost not exceeding 1% of the credit, in the Kingdom of Eswatini
(Swaziland). 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, works 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 September 27, 2021. 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 (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
(R. S. Amar)
Chief General Manager