The Export-Import Bank of India (Exim Bank) has concluded
an agreement with Eastern and Southern African Trade and Development Bank (PTA
Bank) on August 31, 2004 making available to the latter a Line of Credit (LOC)
upto an aggregate sum of USD 10 Million (US Dollar ten million only). The credit
agreement has become effective on September 24, 2004. The credit is available
for financing export of capital goods, plant and machinery, industrial manufactures,
consumer durables and any other items eligible for being exported under the
Foreign Trade Policy of Government of India from India to buyers in any of the
sixteen (16) member countries of PTA Bank, viz. Burundi, Comoros, Djibouti,
Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Somalia, Sudan,
Tanzania, Uganda, Zambia and Zimbabwe.
2. The last dates for opening letters of credit and disbursement
of credit are March 23, 2006 and September 23, 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 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 borrower's member countries only by deduction from the invoice
of 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 commission
paid. Approval for the 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 Dealer Banks 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 direction contained in this circular has been issued
under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA),
1999 (42 of 1999) and is without prejudice to permissions / approvals, if any,
required under any other law.
Yours faithfully,
Grace Koshie
Chief General Manager