Home › Circulars › RBI/2008-09/270

Exim Bank's USD 100 mn Line of Credit to Sri Lanka for Railway Upgrade

Current · Source: Reserve Bank of India · RBI/2008-09/270 · issued FY 2008-09 · ~2 min read

Quick answerRBI notifies AD Category-I banks about Exim Bank's USD 100 million Line of Credit to Sri Lanka for railway line upgradation. At least 85% of contract value must be sourced from India. Banks must advise exporters and handle GR/SDF declarations and commission payments per FEMA rules.

The rule, in the simplest words

Exim Bank gave a loan of 100 million US dollars to Sri Lanka to fix a train line between Colombo and Matara.
At least 85 out of every 100 rupees of the contract must be spent on things made in India.
Banks must tell exporters about this loan and make sure they fill out GR/SDF forms (papers that track exports) correctly.
If an exporter wants to pay a commission to an agent, they can only do so after getting the full payment for the contract, and they must follow the rules.

How it plays out — a real example

A forex & trade-finance officer in Indore gets a call from an exporter who wants to supply railway sleepers for the Sri Lanka project. The officer explains that 85% of the sleepers must come from Indian factories, and reminds the exporter to fill out the GR form before shipping. Later, when the exporter asks to pay a 2% commission to a Sri Lankan agent, the officer checks that the full contract payment has been received first, then allows the remittance.

What changed

Exim Bank signed a Line of Credit agreement with Sri Lanka on July 23, 2008, effective from October 3, 2008, for USD 100 million to upgrade the Colombo-Matara railway line. The circular outlines the terms, including that at least 85% of goods and services must be from India, and sets deadlines for letter of credit opening and disbursement.

What it means for you

AD Category-I banks must facilitate this credit line by advising exporters and ensuring compliance with FEMA rules on GR/SDF forms and agency commission payments. The 85% local sourcing requirement boosts Indian exports, while the 48-72 month timelines for project and supply contracts give clarity on disbursement schedules.

What you must do

Inform exporter clients about the Line of Credit and direct them to Exim Bank for full details.
Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
Allow agency commission remittances only after full contract value realization and compliance with prevailing rules.
Verify that at least 85% of contract value is sourced from India for eligible contracts.

Who it affects

AD Category-I banks, Exporters dealing with Sri Lanka railway projects, Exim Bank

❓ Common questions

Regulatory timeline

Stated effective date effective from October 3, 2008
Decoded by BankPulse 2026-06-19 11:43 IST

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

What is the minimum Indian content requirement under this Line of Credit?

At least 85% of the contract price for goods and services must be supplied from India. The remaining 15% (excluding consultancy) can be procured from outside India.

What are the deadlines for opening Letters of Credit and disbursement?

For project exports, the last date is 48 months from the scheduled completion date of the contract. For supply contracts, it is 72 months from the credit agreement execution date (July 22, 2014).

Can exporters pay agency commission under this LOC?

No agency commission is payable under the LOC itself. However, exporters may use their own resources or EEFC balances to pay commission in free foreign exchange after full contract value realization, subject to RBI guidelines.

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

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(DIR Series) Circular No.30 November&nbsp; 05, 2008 To All Category - I Authorised Dealer Banks Madam / Sir, Exim Bank's Line of Credit of USD 100 million to the Government of the Democratic&nbsp; Socialist Republic of Sri Lanka &nbsp; Export-Import Bank of India (Exim Bank) has concluded an Agreement dated July 23 ,2008 with the Government of the Democratic&nbsp; Socialist Republic of Sri Lanka &nbsp;making&nbsp; available to the latter, a Line of Credit (LOC) of USD&nbsp; 100 million (USD&nbsp;&nbsp; one hundred million&nbsp; ) for upgradation of railway line ( Colombo &ndash; Matara ) in&nbsp; Sri Lanka. The goods and services including consultancy services from India for exports under this 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. Out of the total credit by Exim Bank under this Agreement, the goods and services of the value of at least 85 per cent of the contract price shall be supplied by the seller from India, and the remaining goods and services (other than consultancy services) may be procured by the seller for the purpose of Eligible Contract from outside India. 2. The Credit Agreement under the LOC is effective from October 3, 2008 and date of execution of Agreement is July 23, 2008. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in case of project exports and 72 months ( July&nbsp; 22, 2014) from the execution date of the Credit Agreement in case of supply contracts . 3. Shipments under the LOC will have to be declared on GR / SDF Forms as per instructions issued by Reserve Bank from time to time. 4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances of his Exchange Earners&rsquo; Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.&nbsp; 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&rsquo;s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005&nbsp; or log on to www.eximbankindia.in 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.&nbsp;&nbsp;&nbsp;&nbsp; Yours faithfully, Salim Gangadharan Chief General Manager-in-Charge 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/2008-09/270 · issued FY 2008-09. 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 Sri Lanka railway projects, Exim Bank), your first concrete step on “Exim Bank's USD 100 mn Line of Credit to Sri Lanka for Railway Upgrade” is: “Inform exporter clients about the Line of Credit and direct them to Exim Bank for full details.” (RBI issued this FY 2008-09).

Circular: RBI/2008-09/270 -- Exim Bank's USD 100 mn Line of Credit to Sri Lanka for Railway Upgrade
Issued: FY 2008-09
Action required: Inform exporter clients about the Line of Credit and direct them to Exim Bank for full details.
Action required: Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
Action required: Allow agency commission remittances only after full contract value realization and compliance with prevailing rules.
Action required: Verify that at least 85% of contract value is sourced from India for eligible contracts.
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=4617&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.