What changed
Exim Bank signed a Line of Credit agreement with the Government of Burkina Faso on January 18, 2013, for USD 22.50 million. The credit became effective from September 13, 2013. This circular informs AD Category-I banks about the terms, including sourcing requirements and timelines for disbursement.
What it means for you
Indian exporters can now finance eligible goods and services for Burkina Faso's low-cost housing project under this LOC. Banks must ensure at least 75% of contract value is sourced from India. No agency commission is payable under this LOC, but exporters can use their own resources or EEFC balances for commission if needed.
What you must do
- Inform exporter constituents about the LOC and direct them to Exim Bank for full details.
- Ensure shipments under this LOC are declared on GR/SDF Forms as per RBI instructions.
- Allow remittance of agency commission only after full contract value realization and compliance with prevailing rules.
- Verify that at least 75% of contract value is sourced from India for eligible contracts.
Who it affects
AD Category-I banks, Indian exporters dealing with Burkina Faso, Exim Bank
What is the purpose of this Line of Credit?
It finances a low-cost housing and economical buildings project in Burkina Faso, covering eligible goods, services, machinery, and consultancy from India.
What are the sourcing requirements for exports under this LOC?
At least 75% of the contract price must be supplied from India; the remaining 25% can be procured from outside India.
Can agency commission be paid under this LOC?
No agency commission is payable under the LOC itself, but exporters may use their own resources or EEFC balances for commission after full payment realization.