Export-Import Bank of India (Exim Bank) has extended a $100 million line of credit (LOC) to Bank for Development and Foreign Economic Affairs (Vnesheconombank), Russia.
Exim and the Russian bank signed the agreement for the line of credit on 7 December 2009, for financing exports of equipment, technology or any goods and services from India, the Reserve Bank of India said in a release.
All goods and services eligible for export under the foreign trade policy of the Government of India and whose purchase may be agreed to be financed by Exim Bank under this agreement are eligible for credit under the agreement.
The credit agreement is effective from 18 January 2010 and the terminal date for opening letters of credit is 17 January 2013 (36 months from the effective date of the agreement) and terminal date of disbursements is 17 July 2014 (42 months from the effective date of the agreement), RBI said.
Shipments under the line of credit will have to be declared on GR/SDF forms as per instructions issued by RBI from time to time the release said, adding that no agency commission will be payable in respect of exports financed under the line of credit.
However, RBI may consider, on merit, requests for payment of commission up to a maximum of 5 per cent of the fob/c&f/cif value in respect of goods exported and which require after sales service. In such cases, commission will have to be paid by deduction from the invoice of relevant shipment to agents and the reimbursable amount by the Exim Bank to the negotiating bank will be 90 per cent of the value minus commission paid.
Exporters should obtain approval for the payment of commission from the Foreign Exchange Department of the RBI before the relevant shipment is effected. In cases of exports not involving after sales service, if required, the exporter may use his own resources or utilise balances of his Exchange Earners' Foreign Currency Account for payment of agency commission in free foreign exchange, RBI said.
Authorised dealers are allowed to make such remittance after realisation of full payment of contract value subject to compliance of prevailing instructions on payment of agency commission.