What changed
Exim Bank signed an agreement with PTA Bank on March 3, 2005, effective April 1, 2005, providing a $5 million line of credit for up to 180 days. This facility supports exports to 16 member countries, with specific deadlines for LC opening and disbursement.
What it means for you
Indian exporters gain a new financing avenue for shipments to Eastern and Southern Africa, reducing payment risks. Banks must ensure shipments under this credit are declared on GR/SDF forms and note that no agency commission is payable, though exporters may pay from their own resources if needed.
What you must do
- Inform exporter clients about this line of credit and direct them to Exim Bank for full details.
- Ensure all shipments under this credit are declared on GR/SDF forms as per existing instructions.
- Advise exporters that no agency commission is payable under this credit; any commission must be from their own resources.
Who it affects
Authorised dealer banks handling foreign exchange, Indian exporters of raw materials, commodities, and services to PTA Bank member countries
What is the maximum tenure of the line of credit?
The line of credit is short-term, up to 180 days.
Which countries are covered under this credit?
The credit covers 16 member countries of PTA Bank: Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Somalia, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.
What are the key deadlines for this facility?
Letters of credit must be opened by September 30, 2006, and disbursement must be completed by March 31, 2007.