Page 51 - Banking Finance June 2017

RBI CIRCULAR

Exim Bank's Government of India export subject to compliance with the extant
instructions for payment of agency commission.
supported Line of Credit of USD 31.29
5. AD Category- I banks may bring the contents of this
million to the Government of the circular to the notice of their exporter constituents and

Republic of Nicaragua advise them to obtain full details of the LOC from the
Exim Bank's office at Centre One, Floor 21, World Trade
RBI/2016-17/278 Centre Complex, Cuffe Parade, Mumbai 400 005 or
A.P. (DIR Series) Circular No. 44 from their website www.eximbankindia.in
6. The directions contained in this circular have been
1. Export-Import Bank of India (Exim Bank) has entered
issued under Section 10(4) and Section 11(1) of the
into an agreement dated September 8, 2016 with the
Foreign Exchange Management Act, 1999 (42 of 1999)
Government of the Republic of Nicaragua for making
and are without prejudice to permissions / approvals,
available to the latter, a Government of India
if any, required under any other law.
supported Line of Credit (LOC) of USD 31.29 million (USD
Thirty one million two hundred ninety thousand only) Yours faithfully,
for financing the transmission lines and substations (Deepak Kumar)
project in the Republic of Nicaragua. The credit is Chief General Manager
available for financing export of eligible goods from
India which means any goods and services including Revised Prompt Corrective Action (PCA)
machinery and equipment for the purpose of
transmission lines and substation in terms of the Framework for Banks
Agreement and those which are eligible for export
RBI/2016-17/276
under the Foreign Trade Policy of the Government of
DBS.CO.PPD. BC.No.8/11.01.005/2016-17
India and whose purchase may be agreed to be
financed by the Exim Bank under this agreement. Out 1. Please refer to RBI circulars No. DBS.CO.PP.BC.9/
of the total credit by Exim Bank under this agreement, 11.01.005/2002-03 dated December 21, 2002 and
goods and services of the value of at least 75 per cent DBS.CO.PP.BC.13/11.01.005/2003-04 dated June 15,
of the contract price shall be supplied by the seller from 2004 on the scheme of Prompt Corrective Action.
India and the remaining 25 per cent of goods and
2. The existing PCA framework for banks has since been
services may be procured by the seller for the purpose reviewed and revised. The salient features are provided
of the eligible contract from outside India.
in the Annex.
2. The Agreement under the LOC is effective from March 3. The provisions of the revised PCA framework will be
30, 2017. Under the LOC, the terminal utilization effective from April 1, 2017 based on the financials of
period is 60 months after the scheduled completion the banks for the year ended March 31, 2017. The
date of the project. framework would be reviewed after three years.
3. Shipments under the LOC will have to be declared on 4. The PCA framework does not preclude the Reserve
Export Declaration Form as per instructions issued by Bank of India from taking any other action as it deems
the Reserve Bank from time to time. fit in addition to the corrective actions prescribed in
4. No agency commission is payable for export under the the framework.
above LOC. However, if required, the exporter may use 5. The contents of the circular may be brought to the
its own resources or utilize balances in its Exchange attention of the bank's Board of Directors.
Earners' Foreign Currency Account for payment of
commission in free foreign exchange. Authorised Dealer Yours faithfully
Category- I (AD Category- I) banks may allow such (Parvathy V. Sundaram)
remittance after realization of full eligible value of Chief General Manager-in-Charge T

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