What changed
Exim Bank signed an agreement on June 10, 2022, with Sri Lanka's government for a USD 55 million Short-Term Line of Credit (STLoC) backed by the Government of India. The credit is specifically for financing the procurement of urea fertilizer from India, with the agreement effective from June 20, 2022.
What it means for you
AD Category-I banks must facilitate exports under this STLoC by ensuring shipments are declared on Export Declaration Forms or Shipping Bills as per RBI instructions. No agency commission is payable, but exporters can use own resources or EEFC balances for commission in free foreign exchange after full export value realization.
What you must do
- Inform exporter constituents about the STLoC and direct them to Exim Bank for full details.
- Allow remittance of agency commission only after full export value realization and compliance with extant instructions.
- Ensure all shipments under the STLoC are declared on Export Declaration Forms or Shipping Bills as per RBI guidelines.
Who it affects
AD Category-I banks, Exporters of urea fertilizer to Sri Lanka, Exim Bank
What is the purpose of this USD 55 million credit line?
It is a Government of India-supported Short-Term Line of Credit from Exim Bank to Sri Lanka for financing the procurement of urea fertilizer from India.
What is the utilization period for this credit line?
The terminal utilization period is 6 months from the agreement date (June 20, 2022), extendable up to 12 months with Exim Bank's consent.
Can exporters pay agency commission under this STLoC?
No agency commission is payable, but exporters may use own resources or EEFC balances to pay commission in free foreign exchange after full export value realization, subject to RBI instructions.