What changed
Exim Bank signed a $10 million line of credit agreement with Absolut Bank, Russia, effective December 15, 2005. The credit supports Indian exports under the Foreign Trade Policy, with a 24-month terminal utilization period and 30-month disbursement period from the effective date.
What it means for you
Indian exporters can now access this credit line to finance exports to Russia, potentially boosting trade. AD banks must ensure shipments are declared on GR/SDF forms and handle agency commission payments up to 5% of invoice value, with reimbursements capped at 90% of value minus commission.
What you must do
- Inform exporter clients about the $10 million line of credit to Absolut Bank, Russia.
- Ensure all shipments under this credit are declared on GR/SDF forms as per existing instructions.
- Process agency commission payments up to 5% of f.o.b./c&f/c.i.f. value only after RBI approval and from invoice deductions or EEFC balances.
- Verify that reimbursements from Exim Bank for such shipments are 90% of value minus commission paid.
Who it affects
All Authorised Dealer (AD) banks handling foreign exchange, Indian exporters trading with Russia, Exim Bank and Absolut Bank, Russia
What is the total amount of this line of credit?
The line of credit is for an aggregate sum of USD 10 million.
What is the terminal utilization period for this credit?
The terminal utilization period is 24 months from the effective date of the credit agreement, i.e., December 14, 2007, extendable based on utilisation.
How should agency commission be paid under this credit?
Agency commission up to 5% of invoice value can be paid by deduction from the invoice, with RBI approval needed before shipment. Alternatively, exporters can use EEFC balances or own resources after full payment realisation.