Date: 2022-07-07Category: Not ApplicableState: Union GovernmentCountry: India
Exim Bank's Government of India supported Short - Term Line of Credit (STLoC) of USD 55 million to the Government of the Democratic Socialist Republic of Sri Lanka for procurement of urea fertilizer from India
**Summary:**
This circular, RBI2022202384 A.P. DIR Series Circular No. 06, issued by the Reserve Bank of India (RBI) on July 07, 2022, informs all Category I Authorised Dealer (AD) banks about the Government of India-supported Short Term Line of Credit (STLoC) of USD 55 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Democratic Socialist Republic of Sri Lanka. The STLoC is intended to finance the procurement of urea fertilizer from India.
The agreement between Exim Bank and the Government of Sri Lanka was signed on June 10, 2022, and became effective on June 20, 2022. Financing is available for the export of goods and services from India that are eligible under the Foreign Trade Policy of the Government of India and approved for financing by Exim Bank under this agreement. The terminal utilization period for the STLoC is six months from the date of the agreement's signing, with a possible extension by Exim Bank, not exceeding 12 months from the agreement date.
Shipments under the STLoC must be declared in the Export Declaration Form/Shipping Bill as per RBI instructions. No agency commission is payable under this STLoC; 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' compliance with existing regulations for agency commission payments after full realization of the export value.
AD Category I banks are instructed to inform their exporter clients about the STLoC 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.
The directions in this circular are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999, and are without prejudice to any other required permissions or approvals under any other law.
Key Entities Referenced
Reserve Bank of India: Central bank of India, issuing the circular.
Exim Bank: Export-Import Bank of India, providing the Short Term Line of Credit.
Government of the Democratic Socialist Republic of Sri Lanka: The recipient government of the USD 55 million Short Term Line of Credit.
Short Term Line of Credit (STLoC): A USD 55 million credit line from Exim Bank to Sri Lanka for urea fertilizer procurement from India.
USD 55 million: The amount of the Short Term Line of Credit provided by Exim Bank.
urea fertilizer: The specific product to be procured using the Short Term Line of Credit.
Foreign Trade Policy: The trade policy of the Government of India, under which the export of goods and services will be allowed.
Foreign Exchange Management Act (FEMA), 1999: The act under which the directions in the circular are issued.
भारतीय �रज़व र् ब�क
RESERVE BANK OF INDIA
RBI/2022-2023/84
A.P. (DIR Series) Circular No. 06 July 07, 2022
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Short - Term Line of Credit (STLoC)
of USD 55 million to the Government of the Democratic Socialist Republic of Sri
Lanka for procurement of urea fertilizer from India
Export-Import Bank of India (Exim Bank) has entered into an agreement dated June 10,
2022 with the Government of the Democratic Socialist Republic of Sri Lanka, for making
available to the latter, Government of India supported Short - Term Line of Credit (STLoC)
of USD 55 million (USD Fifty Five Million only) for financing of procurement of urea
fertilizer from India. 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.
2. The Agreement under the STLoC is effective from June 20, 2022. Under the STLoC,
the terminal utilization period is 6 months from the date of signing the agreement or such
other extended date which EXIM Bank may agree at the request of the borrower, provided
however that such extended date shall in no case be beyond 12 months from the date of
agreement.3. Shipments under the STLoC shall be declared in Export Declaration Form/ Shipping
Bill as per instructions issued by the Reserve Bank from time to time.
4. No agency commission is payable for export under the above STLoC. 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 (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 STLoC 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
(Vivek Srivastava)
Chief General Manager