What changed
Exim Bank signed a credit agreement with Mozambique on August 17, 2006, effective December 27, 2006, for a USD 20 million LOC. Utilisation period ends 48 months after project completion or August 16, 2012 for supply contracts. Shipments must be declared on GR/SDF forms.
What it means for you
Banks must ensure exports under this LOC comply with 85% Indian content rule and no agency commission is paid from the credit. Remittance for commission is allowed only after full contract value realisation, using exporter's own resources or EEFC balances. This facilitates Indian exports for Mozambique's electrification.
What you must do
- Inform exporter constituents about Exim Bank's LOC details and eligibility criteria.
- Verify that exports financed under this LOC meet the 85% Indian origin requirement.
- Ensure no agency commission is paid from the LOC; allow remittance only after full contract realisation.
- Advise exporters to declare shipments on GR/SDF forms as per RBI instructions.
- Direct exporters to Exim Bank's Mumbai office for full LOC details.
Who it affects
AD Category-I banks, Exporters of Indian goods and services, Exim Bank
What is the minimum Indian content required for exports under this LOC?
At least 85% of the contract price must be supplied from India or be of Indian origin.
Can agency commission be paid from the LOC proceeds?
No, agency commission is not payable from the credit. However, exporters may use their own resources or EEFC balances for commission after full contract value realisation.
What is the utilisation period for this line of credit?
For project exports, utilisation ends 48 months from scheduled completion; for supply contracts, it ends August 16, 2012 (72 months from agreement date).