**Summary:**
This circular, RBI/2021-2022/102 A.P. DIR Series Circular No.14, issued by the Reserve Bank of India (RBI) on September 30, 2021, informs all Category I Authorised Dealer (AD) banks about a Government of India-supported Line of Credit (LoC) of USD 15 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Sierra Leone. The agreement, dated December 17, 2020, aims to finance the expansion of existing potable water facility rehabilitation projects in four Sierra Leone communities.
Under the LoC, exports of eligible goods and services from India, as defined and approved under the Foreign Trade Policy of the Government of India, will be financed by Exim Bank. At least 75% of the contract price must be for goods, works, and services supplied by the seller from India. The remaining 25% can be procured from outside India. The agreement is effective from August 31, 2021, with a terminal utilization period of 60 months from the project's scheduled completion date.
Shipments under the LoC must be declared in the Export Declaration Form as per RBI instructions. No agency commission is payable for exports under this LoC; however, exporters may use their own resources or Exchange Earners Foreign Currency Account balances for commission payments in free foreign exchange, subject to AD Category I banks' compliance with existing regulations after full realization of the export value.
AD Category I banks are instructed to inform their exporter clients about this LoC and advise them to obtain detailed information from Exim Bank at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005, or from their website www.eximbankindia.in. The circular is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999, and is without prejudice to any other required permissions or approvals.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the issuer of this circular.
Exim Bank: Export-Import Bank of India, which has entered into an agreement with the Government of the Republic of Sierra Leone.
Government of the Republic of Sierra Leone: The recipient of the Line of Credit (LoC) from Exim Bank.
Line of Credit (LoC): A credit facility of USD 15 million from Exim Bank to the Government of the Republic of Sierra Leone.
Foreign Trade Policy: The export policy of the Government of India, compliance to which is required for goods and services financed under the LoC.
Foreign Exchange Management Act (FEMA), 1999: The Act under which the directions in the circular are issued.
Mumbai, Maharashtra: Location of both the Reserve Bank of India and Exim Bank offices mentioned in the circular.
Authorised Dealer (AD) Category I banks: Banks authorized to deal in foreign exchange, to whom the circular is addressed.
भारतीय �रज़व र् बक� /RESERVE BANK OF INDIA
मबुं ई/ MUMBAI – 400 001
RBI/2021-2022/102
A.P. (DIR Series) Circular No.14 September 30, 2021
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit (LoC) of
USD 15 million to the Government of the Republic of Sierra Leone
Export-Import Bank of India (Exim Bank) has entered into an agreement dated December
17, 2020 with the Government of the Republic of Sierra Leone, for making available to
the latter, Government of India supported Line of Credit (LoC) of USD 15 million (USD
Fifteen Million only) for the purpose of expansion of the ongoing projects for rehabilitation
of existing potable water facilities in four communities in the Republic of Sierra Leone.
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 August 31, 2021. 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
(R. S. Amar)
Chief General Manager