What changed
Exim Bank signed a credit agreement on October 29, 2007, effective December 19, 2007, providing a USD 60 million LOC to Myanma Foreign Trade Bank. The credit supports exports for the Thahtay Chaung Hydropower Project executed by BHEL, with at least 85% of contract value sourced from India. Last date for opening LCs is 48 months from project completion for project exports, or 72 months (October 28, 2013) for other supply contracts.
What it means for you
AD Category-I banks must facilitate this LOC by handling related export documentation and remittances. No agency commission is payable under the LOC, but banks may allow commission payments from exporter's own resources or EEFC accounts after full contract value realization. Banks should inform exporters about this facility and direct them to Exim Bank for details.
What you must do
- Notify exporter constituents about the USD 60 million LOC to Myanma Foreign Trade Bank and its terms.
- Ensure shipments under this credit are declared on GR/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.
- Advise exporters to contact Exim Bank for complete LOC details.
Who it affects
AD Category-I banks, Exporters dealing with Myanmar, Bharat Heavy Electricals Limited (BHEL), Exim Bank
What is the minimum Indian content requirement for exports under this LOC?
Goods and services of at least 85% of the contract price must be supplied from India.
Can agency commission be paid under this line of credit?
No agency commission is payable under the LOC, but exporters may use their own resources or EEFC account balances for such payments after full contract value realization.
What is the deadline for opening Letters of Credit under this facility?
For project exports, LCs must be opened within 48 months from scheduled completion dates; for other supply contracts, by October 28, 2013 (72 months from the credit agreement execution date).