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Exim Bank's $15M LOC to PTA Bank for African Exports

Current · Source: Reserve Bank of India · RBI/2007-2008/208 · issued 12 Dec 2007 · ~2 min read

Quick answerRBI notifies AD Category-I banks of Exim Bank's $15 million line of credit to PTA Bank, Kenya, for financing Indian exports to 17 African nations. Key dates: LC opening by Nov 15, 2010; disbursements by May 15, 2011. Commission rules and GR/SDF form requirements apply.

The rule, in the simplest words

Exim Bank gave a $15 million loan (called a Line of Credit) to PTA Bank in Kenya so Indian companies can sell goods to 17 African countries.
Banks must open Letters of Credit (promises to pay) by November 15, 2010, and send all money by May 15, 2011.
For goods that need after-sales service, commission (extra payment to a middleman) can be at most 5% of the price, and Exim Bank will only pay back 90% of the invoice value minus that commission.
All shipments must be reported on GR/SDF forms (special export papers) as the Reserve Bank says.
For other exports, if the exporter wants to pay commission, they must use their own money or a special foreign currency account, and only after the full payment is received.

How it plays out — a real example

A forex & trade-finance officer in Indore helps an exporter who sells machinery to Kenya. The officer reminds the exporter that under Exim Bank's $15 million credit line, they must open the Letter of Credit by November 15, 2010, and that any commission for after-sales service cannot exceed 5% of the invoice value. The officer also checks that the shipment is declared on the correct GR form before processing the payment.

What changed

Exim Bank signed a credit agreement with PTA Bank on October 16, 2007, effective November 16, 2007, providing a $15 million LOC. This enables Indian exporters to access financing for eligible goods and services to PTA member countries. The circular outlines operational timelines, commission caps, and documentation requirements for AD Category-I banks.

What it means for you

Indian exporters gain a structured credit facility to expand into 17 African markets, reducing payment risks. Banks must ensure shipments are declared on GR/SDF forms and adhere to commission limits—5% for after-sales service goods, with reimbursement capped at 90% of invoice value. Non-service exports require exporters to use own resources or EEFC for commission.

What you must do

Inform exporter clients about the LOC and direct them to Exim Bank for full details.
Ensure all shipments under this credit are declared on GR/SDF forms per RBI instructions.
Process commission payments only as per circular: 5% max for after-sales service goods, deducted from invoice; for others, allow remittance after full payment realization.
Verify that LC opening and disbursement deadlines are met—LCs by Nov 15, 2010, disbursements by May 15, 2011.

Who it affects

AD Category-I banks, Indian exporters to PTA Bank member countries, Exim Bank

❓ Common questions

Regulatory timeline

Stated effective date effective November 16, 2007
Decoded by BankPulse 2026-06-19 14:48 IST

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

What is the maximum commission allowed under this LOC?

For exports requiring after-sales service, commission up to 5% of f.o.b./c&f/c.i.f. value is allowed, but must be deducted from the invoice. Reimbursement from Exim Bank is then 90% of the invoice value minus commission. For other exports, commission can be paid from exporter's own resources or EEFC after full payment realization.

Which countries are covered under this line of credit?

The LOC covers 17 PTA Bank member countries: Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.

What are the key deadlines for this credit facility?

The credit agreement is effective from November 16, 2007. Letters of Credit must be opened by November 15, 2010 (36 months), and disbursements must be completed by May 15, 2011 (42 months).

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

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P. (DIR Series) Circular No. 19 December 12, 2007 To All Category - I Authorised Dealer Banks Madam / Sir, Exim Bank's Line of Credit (LOC) to USD 15 million to Eastern and Southern African Trade and Development Bank (PTA Bank) Export-Import Bank of India (Exim Bank) has concluded an agreement dated October 16, 2007 with Eastern and Southern African Trade and Development Bank (PTA Bank), Kenya, making available to the latter a Line of Credit (LOC) for USD 15 million (USD 15 million only) . The credit is available for financing export of eligible goods and services from India to any PTA bank member countries viz., Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe. The goods and services under the Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. 2. The credit agreement is effective from November 16, 2007 and under the LOC, the terminal date for opening Letters of Credit will be November 15, 2010 (36 months from the effective date of the Credit Agreement) and terminal date for disbursements will be May 15, 2011 (42 months from the effective date). 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. While no agency commission shall be payable in respect of exports financed under the above line of credit, Reserve Bank may consider on merit, requests for payment of commission up to a maximum extent of 5 per cent of the f.o.b./ c&f /c.i.f. value in respect of goods exported and which require after sales service. In such cases, commission will have to be paid only by deduction from the invoice of relevant shipment and the reimbursable amount by the Exim Bank to the negotiating bank will be 90 per cent of the f.o.b. / c&f/ c.i.f value minus commission paid. Approval for the payment of commission should be obtained before the relevant shipment is effected. In other cases (i.e. exports not involving after sales service), if required the exporter may use his own resources or utilise 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 of 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 is without prejudice to permissions / approvals, if any, required under any other law.&nbsp;&nbsp;&nbsp;&nbsp; Yours faithfully, (Salim Ganagadharan) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/208 · issued 12 Dec 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, Indian exporters to PTA Bank member countries, Exim Bank), your first concrete step on “Exim Bank's $15M LOC to PTA Bank for African Exports” is: “Inform exporter clients about the LOC and direct them to Exim Bank for full details.” (RBI issued this 12 Dec 2007).

Circular: RBI/2007-2008/208 -- Exim Bank's $15M LOC to PTA Bank for African Exports
Issued: 12 Dec 2007
Action required: Inform exporter clients about the LOC and direct them to Exim Bank for full details.
Action required: Ensure all shipments under this credit are declared on GR/SDF forms per RBI instructions.
Action required: Process commission payments only as per circular: 5% max for after-sales service goods, deducted from invoice; for others, allow remittance after full payment realization.
Action required: Verify that LC opening and disbursement deadlines are met—LCs by Nov 15, 2010, disbursements by May 15, 2011.
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=3977&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.