What changed
Exim Bank signed a credit agreement with Mali on August 14, 2007, effective November 20, 2007, for a USD 45 million line of credit. The last date for opening LCs is 48 months from project completion for project exports, or 72 months from the agreement date for other supply contracts.
What it means for you
Indian exporters can now tap this LOC to supply goods, services, and consultancy for Mali's electricity transmission project. Banks must ensure shipments are declared on GR/SDF forms and that no agency commission is paid from the credit proceeds; any commission must come from the exporter's own resources or EEFC balances.
What you must do
- Inform exporter customers about the LOC and its terms, including the 85% Indian content requirement.
- Advise exporters to contact Exim Bank's Mumbai office for full details.
- Ensure GR/SDF form declarations for shipments under this credit.
- Allow agency commission remittances only from exporter's own resources or EEFC accounts after full contract value realization.
- Comply with FEMA sections 10(4) and 11(1) and other applicable laws.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank
What is the minimum Indian content required under this LOC?
At least 85% of the contract price must be supplied from India.
Can exporters pay agency commission from the LOC proceeds?
No, agency commission is not payable under this LOC. Exporters may use their own resources or EEFC balances for commission in free foreign exchange.
What is the deadline for opening Letters of Credit under this LOC?
For project exports, LCs must be opened within 48 months from the scheduled completion date. For other supply contracts, the deadline is 72 months from the credit agreement date (August 13, 2013).