What changed
Exim Bank signed a credit agreement on January 13, 2007, with Guinea Bissau for a USD 25 million Line of Credit, effective March 15, 2007. The funds are allocated: USD 10 million for electricity, USD 5 million for food processing/agriculture, and USD 10 million for other projects approved by India/Exim Bank. Terminal utilisation is 48 months for project exports and 72 months (until January 12, 2013) for other supply contracts.
What it means for you
Banks must ensure exports under this LOC are declared on GR/SDF forms per RBI instructions. No agency commission is payable on these exports; if needed, exporters can use their own resources or EEFC accounts for commission in free foreign exchange after full payment realisation. AD Category-I banks should inform exporters and direct them to Exim Bank for details.
What you must do
- Advise exporter constituents about this Line of Credit and direct them to Exim Bank's Mumbai office for full details.
- Ensure all shipments under this LOC are declared on GR/SDF forms as per prevailing RBI instructions.
- Do not allow agency commission payments on these exports; only permit remittance from exporter's own resources or EEFC after full contract value realisation.
Who it affects
AD Category-I banks, Exporters dealing with Guinea Bissau, Exim Bank
What is the total amount of the Line of Credit and its purpose?
The LOC is USD 25 million, with USD 10 million for an electricity project, USD 5 million for food processing/agriculture, and USD 10 million for other projects agreed by India/Exim Bank.
Can exporters pay agency commission on these exports?
No, agency commission is not payable. Exporters may use their own resources or EEFC balances for commission in free foreign exchange only after full payment realisation.
What is the terminal utilisation period for this credit?
For project exports, 48 months from scheduled completion; for other supply contracts, 72 months from the credit agreement date, i.e., until January 12, 2013.