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Exim Bank's $27 Million Line of Credit to Senegal

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Source: Reserve Bank of India · RBI/2005-06/413 · issued 15 Jun 2006 · ~2 min read

Quick answerRBI notifies AD banks of Exim Bank's $27 million line of credit to Senegal for irrigation project exports. Letters of credit and disbursement timelines vary by contract type. No agency commission is payable under this facility.

The rule, in the simplest words

Exim Bank gave a $27 million loan to Senegal's government for buying Indian things like machines and services for irrigation (watering crops) projects.
Letters of credit (promises to pay) must be opened within 48 months after the project finishes, or within 72 months from May 10, 2006, depending on the contract type.
No agency commission (extra payment to a middleman) is allowed under this loan; if an exporter wants to pay commission, they must use their own money or their EEFC account (foreign currency savings) after getting full payment.
Shipments must be reported on GR/SDF forms (export declaration papers) as the RBI says.
Banks must tell exporters about this loan and send them to Exim Bank for more details.

How it plays out — a real example

A forex & trade-finance officer in Indore, Priya, gets a call from an exporter wanting to sell irrigation pumps to Senegal. She explains that Exim Bank's $27 million line of credit can finance the deal, but no agency commission can be paid from the loan. Priya advises the exporter to use their own EEFC account for any commission after the full payment is received, and reminds them to declare the shipment on a GR form.

What changed

Exim Bank signed a credit agreement with Senegal's government for a $27 million line of credit, effective May 10, 2006. The credit supports Indian exports of equipment, goods, and services for irrigation projects in Senegal. Terminal dates for LCs and disbursement are set at 48 months from project completion or 72 months from the agreement date.

What it means for you

Indian exporters can now access this credit line to finance eligible exports to Senegal, with specific timelines for LC opening and disbursement. AD banks must ensure no agency commission is paid under this credit, though exporters may use their own EEFC funds for commission in free foreign exchange. This facilitates trade finance for irrigation-related exports.

What you must do

Inform exporter constituents about the $27 million line of credit and direct them to Exim Bank for full details.
Ensure shipments under this credit are declared on GR/SDF forms as per RBI instructions.
Do not allow agency commission payments under this line of credit; permit remittance only from exporter's own resources or EEFC account after full payment realization.
Verify compliance with FEMA sections 10(4) and 11(1) when processing related transactions.

Who it affects

Category I Authorised Dealer Banks, Indian exporters of equipment, goods, and services for irrigation projects, Exim Bank

❓ Common questions

Regulatory timeline

Stated effective date effective May 10, 2006
Decoded by BankPulse 2026-06-19 18:31 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the purpose of this line of credit?

It finances Indian exports of eligible equipment, goods, and services for setting up irrigation projects in Senegal.

What are the key timelines for this credit?

For project exports, LCs must be opened and disbursement completed within 48 months from the scheduled contract completion date. For other supply contracts, the deadline is 72 months from the credit agreement date, i.e., February 7, 2012.

Can exporters pay agency commission under this credit?

No agency commission is payable under this line of credit. However, exporters may use their own resources or EEFC account balances to pay commission in free foreign exchange after full payment realization.

📜 Read the original circular — full text as issued by RBI

RBI/2005-06/413 

 A. P. (DIR Series) Circular No. 37 

 June 15, 2006 

 To, 

 All Category I Authorised Dealer Banks 

 Madam / Sir, 

 Exim Bank's Line of Credit of USD 27 million 
 to the Government of Senegal 

 The Export-Import Bank of India (Exim Bank) 
 has concluded an agreement with the Government of Senegal making available to 
 the latter a Line of Credit (LOC) up to an aggregate sum of USD 27 Million (US 
 Dollar Twenty Seven million only). The Credit Agreement has become effective 
 on May 10, 2006. The credit is available for financing export of equipments, 
 goods and services which are eligible for export from India, under the Foreign 
 Trade Policy of Government of India, to Senegal for setting up Irrigation projects 
 in Senegal. 

 2. The terminal dates for opening Letters 
 of Credit and disbursement of credit are 48 months from scheduled completion 
 date of contract in case of project exports and 72 months from execution date 
 of the Credit Agreement i.e. February 7, 2012 in case of other supply contracts. 

 3. Shipments under the credit will have to 
 be declared on GR / SDF Forms as per instructions issued by the Reserve Bank 
 from time to time. 

 4. No agency commission is payable under 
 the above line of credit. However, if required, the exporter may use his own 
 resources or utilize balances of his EEFC account for payment of commission 
 in free foreign exchange. Authorised Dealer banks may allow such remittance 
 after realisation of full payment of contract value subject to compliance with 
 the prevailing instructions on payment of agency commission. 

 5. Authorised Dealer banks may bring the 
 contents of this circular to the notice of their exporter constituents and advise 
 them to obtain full details of the Line of Credit from Exim Bank's office or 
 its website (www.eximbankindia.com). 

 6. The directions contained in this circular 
 have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management 
 Act (FEMA), 1999 (42 of 1999) and is without prejudice to permissions / approvals, 
 if any, required under any other law. 

 Yours faithfully, 

 (M. Sebastian)

 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/413 · issued 15 Jun 2006. The plain-English explanation above is BankPulse’s own independent summary.

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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Category I Authorised Dealer Banks, Indian exporters of equipment, goods, and services for irrigation projects, Exim Bank), your first concrete step on “Exim Bank's $27 Million Line of Credit to Senegal” is: “Inform exporter constituents about the $27 million line of credit and direct them to Exim Bank for full details.” (RBI issued this 15 Jun 2006).

Circular: RBI/2005-06/413 -- Exim Bank's $27 Million Line of Credit to Senegal
Issued: 15 Jun 2006
Action required: Inform exporter constituents about the $27 million line of credit and direct them to Exim Bank for full details.
Action required: Ensure shipments under this credit are declared on GR/SDF forms as per RBI instructions.
Action required: Do not allow agency commission payments under this line of credit; permit remittance only from exporter's own resources or EEFC account after full payment realization.
Action required: Verify compliance with FEMA sections 10(4) and 11(1) when processing related transactions.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2902&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.