What changed
Exim Bank signed a line of credit agreement with BMCE Bank, Morocco on July 4, 2005, effective July 22, 2005, for USD 10 million. This circular informs authorised dealers about the facility, including timelines and conditions for commission payments.
What it means for you
Banks can now facilitate Indian exports to Morocco under this credit line, with clear deadlines for LCs and disbursements. Commission payments are restricted: no agency commission ordinarily, but up to 5% may be allowed for after-sales service goods, subject to RBI approval before shipment.
What you must do
- Inform exporter customers about the USD 10 million line of credit to BMCE Bank, Morocco.
- Ensure letters of credit are opened by July 21, 2007, and disbursements completed by January 21, 2008.
- Verify that shipments under this credit are declared on GR/SDF forms as per current instructions.
- Allow commission remittances only after full payment realisation, using exporter's own resources or EEFC balances, and for after-sales service goods, ensure prior RBI approval and deduction from invoice.
- Refer to Exim Bank for full details of eligible items and procedures.
Who it affects
Authorised dealer banks handling foreign exchange, Exporters to Morocco, Exim Bank
What is the total amount of the line of credit to BMCE Bank?
The line of credit is for an aggregate sum of USD 10 million, as per the agreement effective July 22, 2005.
Can exporters pay commission under this line of credit?
No agency commission is ordinarily payable. However, for goods requiring after-sales service, commission up to 5% of f.o.b./c&f/c.i.f. value may be allowed, but only with prior RBI approval before shipment and paid by deduction from the invoice.
What are the key deadlines for this credit facility?
Letters of credit must be opened by July 21, 2007, and disbursements must be completed by January 21, 2008.