What changed
Exim Bank signed a Line of Credit agreement with the Central African Republic on October 23, 2008, effective December 29, 2008, for USD 29.50 million. The credit finances a dry process cement plant (400 TPD capacity) and 100 buses for internal transport. At least 85% of contract value must be sourced from India, with up to 15% from outside India (excluding consultancy).
What it means for you
Indian exporters can now access this LOC to supply goods and services for two specific projects in the Central African Republic. AD Category-I banks must ensure that Letters of Credit are opened within 48 months (project exports) or 72 months (supply contracts) from the completion or execution date. No agency commission is payable under this LOC, but exporters can use their own resources or EEFC balances for commission after full payment realization.
What you must do
- Advise exporter clients about this LOC and direct them to Exim Bank for full details.
- Ensure that shipments under this LOC are declared on GR/SDF Forms as per RBI instructions.
- Verify that at least 85% of contract value is sourced from India for each eligible contract.
- Allow remittance of agency commission only after full contract payment realization, using exporter's own resources or EEFC balances.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank
What is the total value of this Line of Credit?
The LOC is for USD 29.50 million, as per the agreement dated October 23, 2008.
What projects are financed under this LOC?
The credit covers setting up a 400 TPD dry process cement plant and procuring 100 buses for internal transport in the Central African Republic.
Can exporters pay agency commission under this LOC?
No agency commission is payable under the LOC. However, exporters may use their own resources or EEFC balances for commission after full payment realization.