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
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.