**Summary:**
This circular from the Reserve Bank of India (RBI/2019-20/162 A.P. DIR Series Circular No.21) dated February 20, 2020, informs all Category I Authorised Dealer (AD Category I) banks about a Government of India supported Line of Credit (LoC) of USD 11.13 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Suriname. The LoC, formalized through an agreement dated September 23, 2019, is designated for financing the Rehabilitation and Upgradation of the De Melkcentrale N.V. Milk Processing Plant in Suriname.
The agreement, effective from January 27, 2020, stipulates that at least 75% of the contract price for goods, works, and services must be supplied by the seller from India. The remaining 25% can be procured from outside India. The terminal utilization period for the LoC is 60 months after the project's scheduled completion date.
Shipments under this LoC are to 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 existing regulations.
AD Category I banks are directed to inform their exporter clients about this LoC and advise them to obtain complete details 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. The circular is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999).
Key Entities Referenced
Reserve Bank of India: The central bank of India, which issued the circular.
Mumbai, Maharashtra: City in India, location of the Reserve Bank of India.
Exim Bank: Export-Import Bank of India, which provided the Line of Credit.
Government of the Republic of Suriname: The recipient of the Line of Credit from Exim Bank.
Line of Credit: A credit facility of USD 11.13 million from Exim Bank to the Government of the Republic of Suriname.
De Melkcentrale N.V. Milk Processing Plant: The project in Suriname being financed by the Line of Credit.
Foreign Trade Policy: The export policy of the Government of India, under which goods and services are eligible for export.
Foreign Exchange Management Act, 1999: Indian legislation under which the circular's directions are issued.
RESERVE BANK OF INDIA
________________________________Mumbai – 400 001______________________________
RBI/2019-20/162
A.P. (DIR Series) Circular No.21 February 20, 2020
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of
USD 11.13 million to the Government of the Republic of Suriname
Export-Import Bank of India (Exim Bank) has entered into an agreement dated
September 23, 2019 with the Government of the Republic of Suriname, for making available to
the latter, Government of India supported Line of Credit (LoC) of USD 11.13 million (USD Eleven
Million and One Hundred Thirty Thousand Only) for the purpose of financing Rehabilitation and
Upgradation of De Melkcentrale N.V. Milk Processing Plant in the Republic of Suriname. 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 January 27, 2020. 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 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 K Moolchandani)
Chief General Manager