RBI-Exim Bank's Line of Credit of USD 198.96 million to the Myanma Foreign Trade Bank (MFTB), Myanmar
March, 24th 2015
RBI/2014-15/509 A.P. (DIR Series) Circular No. 86
March 23, 2015
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Line of Credit of USD 198.96 million to the Myanma Foreign Trade Bank (MFTB), Myanmar
Export-Import Bank of India (Exim Bank) has entered into an Agreement dated December 11, 2013 with the Myanma Foreign Trade Bank (MFTB), Republic of Union of Myanmar, for making available to the latter, a Line of Credit (LOC) of USD 198.96 million (USD One Hundred and Ninety Eight Million and Nine Hundred and Sixty Thousand) for financing 18 irrigation projects (16 ongoing and 2 rehabilitation) in Republic of Union of Myanmar. The goods, machinery, equipment and services including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 50 per cent of the contract price shall be supplied by the seller from India and the remaining 50 percent goods and services may be procured by the seller for the purpose of eligible contract from outside India.
2. The Credit Agreement under the LOC is effective from February 26, 2015. Under the LOC, the last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and 72 months (December 10, 2019) from the execution date of the Credit Agreement in the case of other supply contracts.
3. Shipments under the LOC will have to be declared on EDF/ SDF Forms as per instructions issued by the Reserve Bank from time to time.
4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.
5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in
6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.