**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on July 12, 2018, informs all Category I Authorised Dealer (AD) banks about a Government of India-supported Line of Credit (LoC) of USD 17.50 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Cooperative Republic of Guyana. The LoC, formalized through an agreement dated July 19, 2017, is intended to finance the upgradation of three hospitals in Guyana.
Under this arrangement, the financing of eligible goods and services exports from India is permitted, provided they adhere to the Indian government's Foreign Trade Policy and are approved for financing by Exim Bank. A minimum of 75% of the contract price for goods and services must be supplied by the seller from India; the remaining 25% may be procured from outside India.
The LoC agreement took effect on June 12, 2018, and has a terminal utilization period of 60 months following 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 existing regulations.
AD Category I banks are instructed to inform their exporter clients about this LoC and advise them to obtain further 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. This circular is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999, and does not override any other legal requirements.
Key Entities Referenced
Reserve Bank of India: Central bank of India, issuing the circular.
Mumbai, Maharashtra: City in India where the Reserve Bank of India is located.
Exim Bank: Export-Import Bank of India, involved in the Line of Credit.
Government of the Cooperative Republic of Guyana: The recipient of the Line of Credit from Exim Bank.
Line of Credit: A credit facility of USD 17.50 million from Exim Bank to the Government of Guyana.
Foreign Trade Policy: The export regulations of the Government of India, governing the eligibility of goods and services for export.
Foreign Exchange Management Act FEMA, 1999: Indian legislation under which the circular is issued.
Export Declaration Form: Form used to declare shipments under the Line of Credit
RESERVE BANK OF INDIA
________________________________Mumbai – 400 001______________________________
RBI/2018-19/19
A.P. (DIR Series) Circular No. 3 July 12, 2018
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 17.50 million to the
Government of the Cooperative Republic of Guyana
Export-Import Bank of India (Exim Bank) has entered into an agreement dated July 19, 2017
with the Government of the Cooperative Republic of Guyana for making available to the latter,
a Government of India supported Line of Credit (LoC) of USD 17.50 million (USD Seventeen
million five hundred thousand only) for financing the up-gradation of three hospitals in Guyana.
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 June 12, 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