What changed
Exim Bank signed a credit agreement with Maldives on August 12, 2011, effective October 25, 2011, for a $40 million line of credit. The credit supports Indian exports for constructing 500 housing units in Maldives, with specific sourcing and disbursement timelines.
What it means for you
Indian exporters can now access this credit line to supply goods and services for the Maldives housing project. Banks must ensure at least 75% of contract value is sourced from India and handle LC openings within 48 months for projects or 72 months for supply contracts. No agency commission is payable under this LOC, but exporters can use own resources for commission after full payment.
What you must do
- Inform exporter customers about the $40 million Exim Bank line of credit to Maldives for housing units.
- Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only after full contract payment realization, using exporter's own resources or EEFC balances.
- Advise exporters to contact Exim Bank for full LOC details.
Who it affects
Category-I Authorised Dealer Banks, Indian exporters of goods, services, and consultancy for Maldives housing project, Exim Bank
What is the minimum Indian content required under this line of credit?
At least 75% of the contract price must be supplied from India for goods and services including consultancy.
What are the last dates for opening LCs under this LOC?
For project exports, LCs must be opened within 48 months from scheduled completion of contracts. For supply contracts, the last date is 72 months from the credit agreement execution date, i.e., August 11, 2017.
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 to pay commission in free foreign exchange after full payment realization.