What changed
Exim Bank signed a Line of Credit agreement with the Government of the Republic of Togo on November 23, 2011, effective from March 30, 2012. The LOC of USD 15 million is earmarked for financing eligible Indian exports for Togo's Rural Electrification Project. Key conditions include a 75% Indian content requirement and specific timelines for LC opening and disbursement.
What it means for you
Indian exporters can now access this Exim Bank LOC to secure payments for exports to Togo's rural electrification project. Banks must ensure that at least 75% of the contract value is sourced from India and that no agency commission is paid from the LOC proceeds. AD Category-I banks need to guide exporters on documentation and remittance rules.
What you must do
- Inform exporter customers about the LOC and its terms, including the 75% Indian content requirement.
- Advise exporters to contact Exim Bank for full details and contract eligibility.
- Ensure GR/SDF forms are used for shipments under this LOC as per RBI instructions.
- Allow agency commission remittances only after full contract payment realization and from exporter's own resources or EEFC account.
- Monitor that no agency commission is paid from the LOC proceeds.
Who it affects
AD Category-I banks, Indian exporters of goods, services, and consultancy for Togo's rural electrification, Exim Bank
What is the minimum Indian content required under this LOC?
At least 75% of the contract price must be supplied from India. The remaining 25% (excluding consultancy services) can be procured from outside India.
What are the last dates for opening Letters of Credit under this LOC?
For project exports, LCs must be opened within 48 months from the scheduled completion date of the contract. For supply contracts, the deadline is 72 months from the execution date of the Credit Agreement, i.e., November 22, 2017.
Can agency commission be paid from the LOC proceeds?
No, no agency commission is payable under this LOC. However, exporters may use their own resources or EEFC balances to pay commission in free foreign exchange after full contract payment is realized.