Page 54 - Banking Finance September 2020

RBI CIRCULAR

Indian Offices of foreign bank as a whole) and the 4. No agency commission is payable for export under the
relative agenda note, together with the Board's above LoC. However, if required, the exporter may use
views or directions, should be forwarded to the his own resources or utilize balances in his Exchange
concerned Senior Supervisory Manager (SSM) in Earners’ Foreign Currency Account for payment of
the Department of Supervision, Reserve Bank of commission in free foreign exchange. Authorised Dealer
India within 60 days of submission of the LFAR by Category- I (AD Category- I) banks may allow such
the statutory auditors. remittance after realization of full eligible value of
export subject to compliance with the extant
6. The LFAR format and other instructions issued vide RBI instructions for payment of agency commission.
circular No. DBS.CO.PP.BC.11/11.01.005/2001-2002
dated April 17, 2002 stand repealed. 5. AD Category – I banks may bring the contents of this
circular to the notice of their exporter constituents and
(Ajay Kumar Choudhary) advise them to obtain complete details of the LoC from
Chief General Manager the Exim Bank’s office at Centre One, Floor 21, World
Trade Centre Complex, Cuffe Parade, Mumbai 400 005
Exim Bank's Government of India or from their website www.eximbankindia.in
6. The directions contained in this circular have been
supported Line of Credit (LoC) of USD issued under section 10(4) and 11(1) of the Foreign
215.68 million to the Government of the Exchange Management Act (FEMA), 1999 (42 of 1999)
and are without prejudice to permissions/ approvals, if
Republic of Malawi any, required under any other law.

RBI/2020-2021/38
(R. S. Amar)
September 17, 2020 Chief General Manager
1. Export-Import Bank of India (Exim Bank) has entered into
an agreement dated June 12, 2020 with the Government Basel III Capital Regulations - Review of
of the Republic of Malawi, for making available to the transitional arrangements
latter, Government of India supported Line of Credit (LoC) RBI/2020-21/42
of USD 215.68 million (USD Two Hundred Fifteen Million September 29, 2020
Six Hundred Eighty Thousand only) for the purpose of
financing drinking water supply schemes and other 1. Please refer to circular DOR.BP.BC.No.45/21.06.201/
development projects in the Republic of Malawi. Under 2019-20 dated March 27, 2020 on ‘Basel III Capital
the arrangement, financing of export of eligible goods Regulations - Review of transitional arrangements’.
and services from India, as defined under the agreement, 2. In view of the continuing stress on account of COVID-19,
would be allowed subject to their being eligible for export it has been decided to defer the implementation of the
under the Foreign Trade Policy of the Government of last tranche of 0.625 per cent of the Capital Conservation
India and whose purchase may be agreed to be financed Buffer (CCB) from September 30, 2020 to April 1, 2021.
by the Exim Bank under this agreement. Out of the total Accordingly, the minimum capital conservation ratios in
credit by Exim Bank under the agreement, goods, works para 15.2.2 of Part D ‘Capital Conservation Buffer
and services of the value of at least 75 per cent of the Framework’ of Master Circular, DBR.No.BP.BC.1/
contract price shall be supplied by the seller from India, 21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital
and the remaining 25 per cent of goods and services may Regulations’, shall continue to apply till the CCB attains
be procured by the seller for the purpose of the eligible the level of 2.5 per cent on April 1, 2021.
contract from outside India. 3. The pre-specified trigger for loss absorption through
2. The Agreement under the LoC is effective from conversion / write-down of Additional Tier 1 instruments
September 09, 2020. Under the LoC, the terminal (Perpetual Non-Convertible Preference Shares and
utilization period is 60 months after the scheduled Perpetual Debt Instruments), shall remain at 5.5 per
completion date of the project. cent of risk weighted assets (RWAs) and will rise to
6.125 per cent of RWAs from April 1, 2021.
3. Shipments under the LoC shall be declared in Export
Declaration Form as per instructions issued by the (Usha Janakiraman)
Reserve Bank from time to time. Chief General Manager

54 | 2020 | SEPTEMBER | BANKING FINANCE