RBI/2004-05/373
A.P. (DIR Series) Circular No.35
February 22, 2005
To
All Banks Authorised to Deal in Foreign Exchange
Madam /Sirs,
Exim Bank's Line of Credit of USD 5 million
to Government of Lesotho
The Export-Import Bank of India (Exim Bank)
has concluded an agreement with the Government of Lesotho on October 12, 2004
making available to the latter a Line of Credit (LOC) upto an aggregate sum
of USD 5 million (US Dollar five million only). 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 Foreign
Trade Policy of the Government of India, from India to buyers in Lesotho.
2. The credit agreement has become effective
on February 1, 2005. The last dates for opening letters of credit and disbursement
of credit are January 31, 2007 and July 31, 2007 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 Lesotho only by deduction from the invoice of relevant shipment
to agents in Lesotho only 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 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 directions 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,
(F.R. Joseph)
Chief General Manager