**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on July 27, 2017, informs all Category I Authorised Dealer (AD) banks about the Government of India-supported Line of Credit (LoC) of USD 24.54 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Ghana. The LoC agreement, signed on November 22, 2016, is specifically for financing a sugarcane development and irrigation project in Ghana.
The credit is available for financing the export of eligible goods and services from India that align with the Foreign Trade Policy of the Government of India. These goods include plant, machinery, and equipment, while services encompass consultancy services. A minimum of 75% of the contract price for goods and services must be supplied by the seller from India; the remaining 25% can be procured from outside India.
The LoC agreement became effective on July 7, 2017, and has a terminal utilization period of 60 months following the project's scheduled completion date. Shipments under this LoC must be declared on the Export Declaration Form as per RBI's prevailing 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 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 Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 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.
Mumbai, Maharashtra: The city in India where the Reserve Bank of India is located.
Export-Import Bank of India (Exim Bank): An Indian export credit agency, providing lines of credit to foreign governments.
Government of the Republic of Ghana: The recipient government of the line of credit from Exim Bank.
Line of Credit (LoC): A credit facility of USD 24.54 million from Exim Bank to the Government of the Republic of Ghana.
Foreign Trade Policy: The export and import guidelines and regulations stipulated by the Government of India.
Foreign Exchange Management Act, 1999: The 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.
J K Pandey: Chief General Manager at Reserve Bank of India who signed the circular.
RESERVE BANK OF INDIA
Mumbai - 400 001
RBI/2017-18/ 28 July 27, 2017
A.P. (DIR Series) Circular No. 02
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Government of India supported Line of Credit of USD 24.54
million to the Government of the Republic of Ghana
Export-Import Bank of India (Exim Bank) has entered into an agreement on
November 22, 2016 with the Government of the Republic of Ghana for making
available to the latter, a Government of India supported Line of Credit (LoC) of
USD 24.54 million (USD Twenty four million and five hundred forty thousand
only) for the purpose of financing sugarcane development and irrigation
project in the Republic of Ghana. The credit is available for financing export of
eligible goods and services from India for the purpose of financing sugarcane
development and irrigation project in terms of the agreement and those which
are 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. The goods include plant, machinery and equipment
and services include consultancy services. 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 July 07, 2017. Under the
LoC, the terminal utilization period is 60 months after the scheduled
completion date of the project.
3. Shipments under the LoC will have to be declared on 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 its own resources or utilize
balances in its 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 Section 11(1) of the Foreign Exchange Management Act, 1999 (42
of 1999) and are without prejudice to permissions / approvals, if any, required
under any other law.
Yours faithfully,
(J K Pandey)
Chief General Manager