What changed
RBI has informed AD Category-I banks about a new Line of Credit agreement between Exim Bank and the Government of Sierra Leone, effective July 27, 2021. The LoC of USD 30 million is for financing land and water management infrastructure, with at least 75% of contract value sourced from India.
What it means for you
Indian exporters can now tap this LoC for eligible goods and services to Sierra Leone, but must ensure 75% Indian content. Banks must enforce the no-agency-commission rule and allow commission payments only from exporter's own resources or EEFC after full export realization.
What you must do
- Inform exporter customers about the LoC and direct them to Exim Bank for full details.
- Ensure shipments under this LoC are declared on Export Declaration Forms as per RBI instructions.
- Do not allow agency commission payments for exports under this LoC; if needed, permit only from exporter's own funds or EEFC after full export value realization.
- Verify that at least 75% of contract value is sourced from India for any financing under this LoC.
Who it affects
AD Category-I banks, Indian exporters to Sierra Leone, 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% can be procured from outside India.
Can exporters pay agency commission on these exports?
No agency commission is payable. If needed, exporters may use their own resources or EEFC balances after full export value realization, subject to existing RBI guidelines.