What changed
Exim Bank signed a Line of Credit agreement with the Government of Suriname on March 22, 2010, for USD 5.763 million to finance helicopters from Hindustan Aeronautics Limited. The credit became effective on July 28, 2010, with specific timelines for opening LCs and disbursement.
What it means for you
Indian exporters can now access this LOC for eligible goods and services, with at least 85% of contract value sourced from India. AD Category-I banks must facilitate remittances for agency commission only after full payment realization and compliance with existing rules.
What you must do
- Inform exporter clients about the LOC details and direct them to Exim Bank for full terms.
- Ensure all shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow agency commission remittances only after full contract payment realization and adherence to prevailing guidelines.
- Advise exporters that no agency commission is payable under the LOC itself; they may use EEFC or own resources if needed.
Who it affects
AD Category-I banks, Exporters dealing with Suriname, Hindustan Aeronautics Limited and its suppliers
What is the purpose of this Line of Credit?
It finances the purchase of helicopters from Hindustan Aeronautics Limited by the Government of Suriname, covering eligible goods and services from India.
What are the key timelines for this LOC?
The credit agreement is effective from July 28, 2010. For project exports, LCs must be opened and disbursed within 48 months of scheduled completion; for supply contracts, within 72 months from the execution date (March 21, 2016).
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 in free foreign exchange, subject to RBI guidelines.