**Summary:**
This circular, RBI/2018-19/75 A.P. (DIR Series) Circular No. 14, issued by the Reserve Bank of India on November 15, 2018, informs all Category I Authorised Dealer banks about a Government of India-supported Line of Credit (LoC) of USD 3.5 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Suriname. The LoC agreement, dated June 20, 2018 and effective from October 23, 2018, is intended to finance the servicing and maintenance of three Chetak helicopters in Suriname.
Under this arrangement, the financing of eligible goods and services exported from India, consistent with the Government of India's Foreign Trade Policy, will be permitted, subject to Exim Bank's approval. At least 75% of the contract price for goods and services must originate from India. The remaining 25% may be sourced from outside India. The terminal utilization period for the LoC is 60 months after the scheduled project completion date.
Shipments under the LoC must be declared in the Export Declaration Form as per RBI's 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 ensuring realization of the full eligible export value and compliance with existing agency commission payment instructions.
AD Category I banks are instructed to inform their exporter clients about this LoC and advise them to obtain full 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 and is without prejudice to other required permissions or approvals under any other law.
Key Entities Referenced
Reserve Bank of India: Central bank of India, issuer of 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 agreement.
Government of the Republic of Suriname: Counterparty to the Line of Credit agreement with Exim Bank.
Line of Credit: Government of India supported financial assistance of USD 3.5 million from Exim Bank to the Government of the Republic of Suriname.
Chetak helicopters: Equipment being financed under the Line of Credit for servicing and maintenance in the Republic of Suriname.
Foreign Trade Policy: Policy of the Government of India governing export eligibility.
Foreign Exchange Management Act, 1999: Indian legislation under which the circular's directions are issued.
RESERVE BANK OF INDIA
________________________________Mumbai – 400 001______________________________
RBI/2018-19/75
A.P. (DIR Series) Circular No. 14 November 15, 2018
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit of USD 3.5 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 3.5 million (USD Three million and
five hundred thousand only) for the purpose of financing the servicing and maintenance of 3
(three) Chetak helicopters 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