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Exim Bank's USD 16 Million Line of Credit to Suriname

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Source: Reserve Bank of India · RBI/2004-05/242 · issued 26 Oct 2004 · ~2 min read

Quick answerRBI notified banks about Exim Bank's USD 16 million line of credit to Suriname, effective September 28, 2004. Banks must inform exporters, ensure no agency commission is paid from credit proceeds, and follow GR/SDF form procedures.

The rule, in the simplest words

Exim Bank gave a loan of USD 16 million to the government of Suriname (a country in South America) for buying things from India.
Banks must tell exporters (people who sell goods to other countries) about this loan and send them to Exim Bank for more details.
No one can pay a middleman (agency commission) using the loan money; if a middleman must be paid, the exporter has to use their own money.
All shipments (goods sent) under this loan must be reported on special forms called GR/SDF forms, following the rules.
Letters of credit (promises to pay) must be opened by September 27, 2006, and all money must be used by March 27, 2007.

How it plays out — a real example

A forex & trade-finance officer in Indore receives a call from an exporter who wants to sell electrical cables to Suriname. The officer explains that Exim Bank's USD 16 million loan covers this, but warns that no agency commission can be taken from the loan funds—if the exporter needs to pay a local agent in Suriname, they must use their own money. The officer also reminds the exporter to fill out the GR/SDF form for the shipment and to open the letter of credit before September 27, 2006.

What changed

Exim Bank signed a credit agreement with the Government of Suriname on August 14, 2004, effective September 28, 2004, for a USD 16 million line of credit. Of this, USD 12.89 million is earmarked for an electrical transmission line project by Indian firms, and USD 3.11 million for other eligible exports under India's Foreign Trade Policy.

What it means for you

Banks must facilitate this credit by advising exporters on the terms, including the ban on agency commissions from credit funds. The circular mandates strict adherence to GR/SDF form declarations and sets deadlines for L/C opening (September 27, 2006) and disbursement (March 27, 2007). Non-compliance could attract FEMA penalties.

What you must do

Inform exporter customers about the line of credit and direct them to Exim Bank for full details.
Ensure no agency commission is paid from the credit proceeds; exporters must use own funds if commission is required.
Verify that shipments under this credit are declared on GR/SDF forms as per current instructions.
Monitor L/C opening and disbursement deadlines: September 27, 2006 and March 27, 2007 respectively.

Who it affects

Authorised Dealer Banks handling foreign exchange, Exporters dealing with Suriname under this line of credit, Exim Bank and its counterparties

❓ Common questions

Regulatory timeline

Stated effective date effective September 28, 2004
Decoded by BankPulse 2026-06-19 21:45 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the total amount of the line of credit and how is it allocated?

The total line of credit is USD 16 million. USD 12.89 million is for an electrical transmission line project by PEC Ltd./L & T Ltd., and USD 3.11 million is for other eligible exports under India's Foreign Trade Policy.

What are the key deadlines for this credit?

Letters of credit must be opened by September 27, 2006, and disbursement must be completed by March 27, 2007.

Can exporters pay agency commission from the credit proceeds?

No, agency commission is not payable from the credit. Exporters must use their own resources if they need to pay any commission.

📜 Read the original circular — full text as issued by RBI

RBI/2004-05/242
 A.P. (DIR Series) Circular No.21 

 October 26, 2004 

 To

 All Banks Authorised to Deal in Foreign Exchange 

 Madam / Sirs, 

 Exim Bank's Line of Credit of USD 16 million 
 to Government of Suriname 

 The Export-Import Bank of India (Exim Bank) 
 has concluded an agreement with the Government of Suriname on August 14, 2004 
 making available to the latter a Line of Credit (LOC) upto an aggregate sum 
 of USD 16 million (US Dollar sixteen million only). The credit agreement has 
 become effective on September 28, 2004. Out of the total amount of USD 16 million, 
 an amount of USD 12.89 million will be utilised for the setting up of an electrical 
 transmission line from Paranam to Parimaribo by PEC Ltd./ L & T Ltd. of 
 India and the balance amount of USD 3.11 million will be available for export 
 of any other eligible goods and services for being exported under the Foreign 
 Trade Policy of Government of India from India to buyers in Suriname. 

 2. The last dates for opening letters of credit 
 and disbursement of credit are September 27, 2006 and March 27, 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. No agency commission shall be payable in 
 respect of exports financed under the above line of credit. 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

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/242 · issued 26 Oct 2004. The plain-English explanation above is BankPulse’s own independent summary.

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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Authorised Dealer Banks handling foreign exchange, Exporters dealing with Suriname under this line of credit, Exim Bank and its counterparties), your first concrete step on “Exim Bank's USD 16 Million Line of Credit to Suriname” is: “Inform exporter customers about the line of credit and direct them to Exim Bank for full details.” (RBI issued this 26 Oct 2004).

Circular: RBI/2004-05/242 -- Exim Bank's USD 16 Million Line of Credit to Suriname
Issued: 26 Oct 2004
Action required: Inform exporter customers about the line of credit and direct them to Exim Bank for full details.
Action required: Ensure no agency commission is paid from the credit proceeds; exporters must use own funds if commission is required.
Action required: Verify that shipments under this credit are declared on GR/SDF forms as per current instructions.
Action required: Monitor L/C opening and disbursement deadlines: September 27, 2006 and March 27, 2007 respectively.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=1988&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.