Page 54 - Banking Finance November 2020

RBI CIRCULAR

Board approved policies, a Master Agreement may be reconstruction of Aldo Chavarria Hospital in the Republic
entered into between the two partner institutions of Nicaragua. Under the arrangement, financing of
which shall inter-alia include, terms and conditions of export of eligible goods and services from India, as
the arrangement, the criteria for selection of partner defined under the agreement, would be allowed subject
institutions, the specific product lines and areas of to their being eligible for export under the Foreign
operation, along with provisions related to segregation Trade Policy of the Government of India and whose
of responsibilities as well as customer interface and purchase may be agreed to be financed by the Exim
protection issues, as detailed in the Annex. Bank under this agreement. Out of the total credit by

5. The Master Agreement may provide for the banks to Exim Bank under the agreement, goods, works and
services of the value of at least 75 per cent of the
either mandatorily take their share of the individual
contract price shall be supplied by the seller from India,
loans originated by the NBFCs in their books as per the
terms of the agreement, or to retain the discretion to and the remaining 25 per cent of goods and services
may be procured by the seller for the purpose of the
reject certain loans after their due diligence prior to
eligible contract from outside India.
taking in their books, subject to the conditions specified
in the Annex. 2. The Agreement under the LoC is effective from
6. The banks can claim priority sector status in respect of September 15, 2020. Under the LoC, the terminal
utilization period is 60 months after the scheduled
their share of credit while engaging in the CLM adhering
completion date of the project.
to the specified conditions.
3. Shipments under the LoC shall be declared in Export
7. The CLM shall not be applicable to foreign banks
(including WOS) with less than 20 branches. Declaration Form as per instructions issued by the
Reserve Bank from time to time.
8. This circular supersedes the circular FIDD.CO.Plan.BC.08/
04.09.01/2018-19 dated September 21, 2018. However, 4. No agency commission is payable for export under the
above LoC. However, if required, the exporter may use
outstanding loans in terms of the circular ibid would
continue to be classified under priority sector till their his own resources or utilize balances in his Exchange
repayment or maturity, whichever is earlier. Earners’ Foreign Currency Account for payment of
commission in free foreign exchange. Authorised Dealer
(Gautam Prasad Borah) Category- I (AD Category- I) banks may allow such
Chief General Manager-in-Charge remittance after realization of full eligible value of
export subject to compliance with the extant
instructions for payment of agency commission.
Exim Bank's Government of India
5. AD Category – I banks may bring the contents of this
supported Line of Credit (LoC) of USD circular to the notice of their exporter constituents and
20.10 million to the Government of the advise them to obtain complete details of the LoC from
the Exim Bank’s office at Centre One, Floor 21, World
Republic of Nicaragua Trade Centre Complex, Cuffe Parade, Mumbai 400 005

RBI/2020-2021/64 or from their website www.eximbankindia.in.
November 05, 2020 6. The directions contained in this circular have been
issued under section 10(4) and 11(1) of the Foreign
1. Export-Import Bank of India (Exim Bank) has entered Exchange Management Act (FEMA), 1999 (42 of 1999)
into an agreement dated June 12, 2020 with the and are without prejudice to permissions/ approvals, if
Government of the Republic of Nicaragua, for making any, required under any other law.
available to the latter, Government of India supported
Line of Credit (LoC) of USD 20.10 million (USD Twenty (R. S. Amar)
million One Hundred thousand only) for the purpose of Chief General Manager

54 | 2020 | NOVEMBER | BANKING FINANCE