**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on November 15, 2018, announces a Government of India-supported Line of Credit (LoC) of USD 27.5 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 June 20, 2018, is intended to finance the upgradation of transmission network infrastructure in Suriname.
Under this arrangement, the financing of eligible goods and services exported from India is permitted, provided they adhere to the Foreign Trade Policy of the Government of India and are approved for financing by Exim Bank. The agreement stipulates that at least 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 is effective from October 23, 2018, and has a terminal utilization period of 60 months following the project's scheduled completion date. Export declarations for shipments under this LoC must be made according to the 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 to pay commissions in free foreign exchange, subject to AD Category I banks' approval after the full eligible export value is realized and compliance with existing agency commission payment regulations.
Authorised Dealer Category I banks are instructed to inform their exporter clients about this LoC and advise them to obtain further details from Exim Bank at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005, or via their website: www.eximbankindia.in.
This circular is issued under the authority of Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999, and does not supersede any other legal requirements.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the publisher of the circular.
Mumbai, Maharashtra: City in India, location of the Reserve Bank of India.
Exim Bank: Export-Import Bank of India, which has a line of credit agreement with Suriname.
Government of the Republic of Suriname: The recipient of the USD 27.5 million line of credit from Exim Bank.
Line of Credit: Government of India supported Line of Credit of USD 27.5 million to the Government of the Republic of Suriname
Foreign Trade Policy: The export regulations policy of the Government of India.
Foreign Exchange Management Act (FEMA), 1999: Indian legislation related to foreign exchange regulations.
Exchange Earners Foreign Currency Account: An account used by exporters to hold foreign currency earnings.
RESERVE BANK OF INDIA
________________________________Mumbai – 400 001______________________________
RBI/2018-19/74
A.P. (DIR Series) Circular No.13 November 15, 2018
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 27.5 million to the
Government of the Republic of Suriname
Export-Import Bank of India (Exim Bank) has entered into an agreement dated June 20, 2018
with the Government of the Republic of Suriname for making available to the latter, a
Government of India supported Line of Credit (LoC) of USD 27.5 million (USD Twenty seven
million and five hundred thousand only) for the purpose of financing up-gradation of
transmission network infrastructure 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 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 October 23, 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