What changed
Exim Bank signed a Line of Credit agreement with Sierra Leone on February 19, 2010, effective April 7, 2010, for USD 30 million. The credit will fund rehabilitation and new potable water infrastructure at six locations, plus consultancy services from India.
What it means for you
Indian exporters can now bid for these water projects with assured financing from Exim Bank. Banks must ensure that at least 85% of goods/services are Indian-origin and that no agency commission is paid from the LOC proceeds. Remittances for commission, if any, must come from exporter's own resources or EEFC account after full payment realization.
What you must do
- Inform exporter customers about this LOC and direct them to Exim Bank for full details.
- Ensure shipments under this LOC are declared on GR/SDF Forms as per extant RBI instructions.
- Verify that at least 85% of contract value is sourced from India before processing payments.
- Do not allow agency commission payments from LOC proceeds; only permit from exporter's own resources after full contract value realization.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank
What is the purpose of this USD 30 million Line of Credit?
It is for financing rehabilitation of six potable water projects in Sierra Leone, including at Lungi International Airport and several communities, plus consultancy services from India.
What are the sourcing requirements for exporters under this LOC?
At least 85% of the contract price must be supplied from India. The remaining 15% (excluding consultancy) can be procured from outside India.
Can agency commission be paid from the LOC funds?
No. No agency commission is payable under this LOC. If needed, the exporter must use own resources or EEFC account, and AD banks can allow remittance only after full contract value is realized.