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Exim Bank's USD 8 Million Line of Credit to Seychelles

Current · Source: Reserve Bank of India · RBI/2006-2007/428 · issued 05 Jun 2007 · ~2 min read

Quick answerRBI notifies AD Category-I banks about Exim Bank's USD 8 million LOC to Seychelles for essential commodities. Disbursements must occur within 72 months from April 25, 2007. No agency commission is payable; exporters may use EEFC balances for commission in free foreign exchange.

The rule, in the simplest words

Exim Bank gave a USD 8 million line of credit (LOC) to Seychelles starting April 25, 2007 for buying essential commodities that India can export.
Banks can only open letters of credit or give money for up to 72 months from that start date.
All shipments must be reported on GR or SDF forms as instructed by RBI.
No agency commission (extra fee paid to a middleman) can be taken from the export money; if the exporter wants to pay commission, they must use their own money or EEFC account and only after the full contract is paid.
Category‑I banks should tell exporters about this LOC and direct them to Exim Bank for details.

How it plays out — a real example

A senior export officer at a Category‑I bank in Mumbai helps a textile exporter ship goods to Seychelles under the LOC. He checks the GR form, opens the letter of credit within the 72‑month window, and reminds the exporter that no commission can be taken from the export proceeds.

What changed

Exim Bank signed a Line of Credit agreement with the Government of Seychelles on July 10, 2006, effective from April 25, 2007, for USD 8 million. The LOC finances essential commodities eligible under India's Foreign Trade Policy. Shipments must be declared on GR/SDF forms, and no agency commission is payable except via exporter's own resources or EEFC accounts.

What it means for you

Banks must facilitate exports under this LOC by ensuring compliance with GR/SDF declaration and commission rules. The 72-month disbursement window requires careful tracking of letter of credit openings. Exim Bank's role as financier means banks should guide exporters to Exim Bank for full details.

What you must do

Inform exporter constituents about the LOC and direct them to Exim Bank for details.
Ensure all shipments under this LOC are declared on GR or SDF forms as per RBI instructions.
Allow remittance of agency commission only after full contract value realization, using exporter's own resources or EEFC balances.
Monitor that no agency commission is paid from export proceeds under this LOC.

Who it affects

AD Category-I banks, Exporters dealing with Seychelles under this LOC, Exim Bank

❓ Common questions

Regulatory timeline

Stated effective date effective from April 25, 2007
Decoded by BankPulse 2026-06-19 16:32 IST

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

What is the last date for opening Letters of Credit under this LOC?

The last date for opening LC or disbursements is 72 months from the effective date of the Credit Agreement, which is April 25, 2007.

Can exporters pay agency commission on exports under this LOC?

No agency commission is payable from export proceeds. However, exporters may use their own resources or EEFC account balances to pay commission in free foreign exchange, after full contract value realization.

Which authority issued this circular?

This circular was issued under sections 10(4) and 11(1) of FEMA, 1999, by the Chief General Manager of RBI.

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

RBI/2006-2007/428
 A.P. 
(DIR Series) Circular No.69 
 Jun 
5, 2007. 
 To 
 All 
Category - I Authorised Dealer Banks 
 Madam 
/ Sirs, 
 Exim 
Bank's Line of Credit (LOC) of USD 8 million
 to 
the Government of Seychelles 

 Export-Import 
Bank of India (Exim Bank) has concluded an agreement dated July 10, 2006 with 
 Government of Seychelles, making available to the latter, a Line of Credit 
(LOC) for USD 8 million (USD Eight million only), for financing purchase of essential 
commodities, which are eligible for export under the Foreign Trade Policy of the 
Government of India and the purchase of which goods may be agreed to be financed 
by Exim Bank under this Agreement. 

2. The Credit Agreement under the LOC is effective from April 25, 2007. Under 
the LOC, the last date for opening Letter of Credit / Disbursements is 72 months 
from the effective date of Credit Agreement. 

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

 4. 
No agency commission shall be payable in respect of exports financed 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 Category-I (AD Category-I) banks may allow such remittance 
after realisation of full payment of contract value subject to compliance with 
prevailing instructions on payment of agency commission. 

 5. 
AD Category - I 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 at Centre One, Floor 21, World Trade Centre 
Complex, Cuffe Parade, Mumbai 400 005. 
 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 
are without prejudice to permissions / approvals, if any, required under any other 
law. 
 Yours 
faithfully, 
 Salim 
Gangadharan
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/428 · issued 05 Jun 2007. 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 (AD Category-I banks, Exporters dealing with Seychelles under this LOC, Exim Bank), your first concrete step on “Exim Bank's USD 8 Million Line of Credit to Seychelles” is: “Inform exporter constituents about the LOC and direct them to Exim Bank for details.” (RBI issued this 05 Jun 2007).

Circular: RBI/2006-2007/428 -- Exim Bank's USD 8 Million Line of Credit to Seychelles
Issued: 05 Jun 2007
Action required: Inform exporter constituents about the LOC and direct them to Exim Bank for details.
Action required: Ensure all shipments under this LOC are declared on GR or SDF forms as per RBI instructions.
Action required: Allow remittance of agency commission only after full contract value realization, using exporter's own resources or EEFC balances.
Action required: Monitor that no agency commission is paid from export proceeds under this LOC.
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=3578&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.