Exim Bank's USD 416.39 mn Line of Credit to Sri Lanka

RBI/2010-11/406 A.P. (DIR Series) Circular No. 43 February 14, 2011 To All Category - I Authorised Dealer Banks Madam / Sir, Exim Bank's Line of Credit of USD 416.39 million to the Government of the Democratic Socialist Republic of Sri Lanka Export-Import Bank of India (Exim Bank) has concluded an Agreement dated November 26, 2010 with the Government of the Democratic Socialist Republic of Sri Lanka making available to the latter, a Line of Credit (LOC) of USD 416.39 million (USD four hundred sixteen million three hundred ninety thousand) for financing eligible goods and services including consultancy services for financing (i) Track laying by IRCON on the Omanthai- Pallai sector (USD 185.35 million) ,(ii) Track laying by IRCON on the Madhu Church-Tallaimannar sector (USD 149.74 million), and (iii) Track laying on the Medawachchiya- Madhu railway line (USD 81.30 million) in 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 including consultancy 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 15 per cent 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 January 24, 2011 and the date of execution of Agreement is November 26, 2010. 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 the case of project exports and 72 months (November 25, 2016) from the execution date of the Credit Agreement in the case of supply contracts. 3.         Shipments under the LOC will have to be declared on GR / SDF Forms as per instructions issued by the 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 in his Exchange Earners’ 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. 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 the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005  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. Yours faithfully, (G. Jaganmohan Rao) Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/406 · issued 14 Feb 2011. The plain-English explanation above is BankPulse’s own independent summary.

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