Exim Bank of India (Exim) has operationalised a credit agreement under a line of credit of $36 million for financing exports of eligible goods and services to Mali from 18 January 2010.
The agreement was executed on 12 October 2009 and the last date for opening of letters of credit and disbursement would be 48 months from the scheduled completion dates of contracts in case of project exports and 72 months (11 October 2015) from the execution date of the credit agreement in case of supply contracts, the Reserve Bank of India (RBI) said in a release.
The line of credit covers exports of all goods and services, including consultancy services, from India, which are eligible for export under the Foreign Trade Policy of the government and whose purchases are eligible to be financed by the Exim Bank.
Under the agreement, to be eligible for Exim credit, the goods and services of the value of at least 85 per cent of the contract price has to of Indian origin, ie, supplied by a seller from India, while the remaining 15 per cent goods and services (other than consultancy services) may be procured by the seller from `eligible contractors' outside India.
Shipments under the LOC will have to be declared on GR/SDF forms as per instructions issued from time to time, RBI said, adding that no agency commission is payable under the above LOC.
The exporter may, however, use his own resources or utilise balances of his Exchange Earners' Foreign Currency Account for payment of commission in free foreign exchange, RBI noted.
RBI has allows authorised dealer Category- l banks to make remittances after realisation of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.
RBI has also asked such banks to inform their exporter constituents and advise them to obtain full details of the LOC.