What changed
Exim Bank signed a credit agreement with PTA Bank effective February 17, 2006, for a USD 5 million line of credit. This facility supports Indian exports of eligible goods and services to 17 member countries of PTA Bank in Eastern and Southern Africa.
What it means for you
Banks can now process letters of credit and disbursements under this LOC until the specified deadlines. Exporters can use EEFC balances for agency commission, but no reimbursement from Exim Bank for such commissions; RBI approval is needed for commissions above 5% of invoice value.
What you must do
- Inform exporter constituents about the LOC terms and eligible countries.
- Ensure LCs are opened by August 16, 2007, and disbursements completed by February 16, 2008.
- Verify GR/SDF form declarations for shipments under this credit.
- Handle agency commission remittances only after full contract value realization and per prevailing RBI instructions.
- Refer exporters to Exim Bank for full LOC details.
Who it affects
Authorised Dealer banks handling foreign exchange, Indian exporters to PTA Bank member countries, Exim Bank and its negotiating banks
What is the total amount of this line of credit?
The line of credit is for an aggregate sum of USD 5 million, made available by Exim Bank to PTA Bank.
Which countries are eligible for financing under this LOC?
The 17 eligible countries are Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.
Can exporters claim reimbursement for agency commission from Exim Bank?
No, Exim Bank will not reimburse any agency commission paid by exporters. Such payments must be made from the exporter's own resources or EEFC account.