RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI - 400 001
RBI/2004/63
A.P. (DIR Series) Circular No.70
February 20, 2004
To
All Authorised Dealers in Foreign Exchange
Madam/Sirs,
Exim Bank's Line of Credit of USD 10
million to ABSA Bank Ltd., South Africa
Export-Import Bank of India (Exim Bank)
has concluded an agreement with ABSA Bank Ltd., South Africa on July 4, 2003
making available to the latter, a Line of Credit (LOC) upto an aggregate sum
of USD 10 million (U.S. Dollar ten million only). The Credit Agreement has become
effective from December 30, 2003 and is available for financing export from
India of Category 'A' and Category 'B' goods as per Memorandum of Instructions
on Project & Service Exports (Memorandum PEM) and any other item including
raw materials and commodities that may be agreed upon between Exim Bank and
ABSA Bank Ltd. to buyers in South Africa.
2. The terminal dates for opening letters
of credit and utilisation of credit are June 29, 2005 and December 29, 2005,
respectively.
3. Shipments under the credit will have
to be declared on GR / SDF Forms as per instructions issued from time to time.
4. While no agency commission shall be
payable in respect of exports financed under the above line of credit, Reserve
Bank may consider, on merit, requests for payment of commission upto a maximum
extent of 5 per cent of the f.o.b. / c&f / c.i.f. value in respect of goods
exported and which require after-sales service. In such cases, commission
will have to be paid in South Africa only by deduction from the invoice of the
relevant shipment and the reimbursable amount by the Exim Bank to the negotiating
bank will be 90 per cent of the f.o.b./c &f /c.i.f. value minus the
commission paid. Approval for payment of commission should be obtained before
the relevant shipment is effected.
In other cases (i.e. exports not involving
after sales service), if the exporter is required to pay agency commission,
he will have to use his own resources for such payments.
5. Authorised Dealers may bring the contents
of this circular to the notice of their exporter constituents and advise them
to obtain full details of the Line of Credit from Exim Bank's office or its
website.
6. The directions contained in this circular
have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management
Act, 1999 (42 of 1999).
Yours faithfully,
Grace Koshie
Chief General Manager