What changed
Exim Bank signed a Line of Credit agreement with the Government of Cameroon on September 14, 2012, effective March 8, 2013, for USD 42 million. This circular informs AD Category-I banks about the operational details, including sourcing requirements and timelines.
What it means for you
Indian exporters can now access this LOC to finance exports for Cameroon's Casava Plantation Project, with a mandatory 75% Indian content. Banks must ensure compliance with FEMA rules, including GR/SDF form declarations and agency commission restrictions. The LOC provides a structured payment mechanism for eligible exports.
What you must do
- Inform exporter clients about the LOC and its terms, including the 75% Indian sourcing requirement.
- Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow agency commission remittances only after full contract payment realization, using exporter's own resources or EEFC balances.
- Advise exporters to contact Exim Bank for detailed LOC information.
Who it affects
AD Category-I banks, Indian exporters to Cameroon, Exim Bank
What is the minimum Indian content required under this LOC?
At least 75% of the contract price must be sourced from India for goods, services, machinery, equipment, and consultancy.
What are the timelines for using this LOC?
For project exports, LCs and disbursements must be completed within 48 months from the scheduled completion date(s) of contract(s). For supply contracts, the deadline is 72 months (September 13, 2018) from the execution date of the Credit Agreement.
Can agency commission be paid 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 contract payment realization.