RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI-400 001
RBI/2004/149
A.P.(DIR Series) Circular No.85
April 16, 2004
To
All Authorised Dealers in Foreign Exchange
Dear Sirs/Madam,
Exim Bank's Lines of Credit of
USD 10 Million each to Government of Zambia and to Bank Gospodarstwa Krajowego
(National Economy Bank - BGK Bank),
Poland
Export-Import Bank of India (Exim
Bank) has concluded agreements with Ministry of Finance, Government of Zambia
on December 20, 2003 and BGK Bank, Poland on January 20, 2004 making available
Lines of Credit (LOCs) upto an aggregate sum of USD 10million (U.S.Dollar ten
million) each. The Credit Agreements have become effective from March 18, 2004
and March 15, 2004 respectively and are available for financing export of eligible
Indian goods and services to Zambia and Poland under the respective LOCs.
2. The last dates for opening Letters
of Credit and disbursements are March 17, 2006 and September 17, 2006, respectively
in respect of the LOC extended to Government of Zambia. In respect of LOC extended
to BGK Bank, Poland, the last dates for opening letters of credit and for disbursements
are March 14, 2006 and September 14, 2006 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 lines of credit,
Reserve Bank may consider, on merit, requests for payment of commission up to
a maximum extent of 5 per cent 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 Zambia and Poland only for the exports
under the respective LOCs, 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),
requiring payment of agency commission, the exporter 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 Lines 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