Introduction
Exim Bank extends lines of credit to overseas governments/agencies nominated by them or financial institutions overseas to enable buyers in those countries to import capital/engineering goods, industrial manufactures and related services and any other items (with the approval of Exim Bank and the Borrower) from India on deferred payment terms. This facility enables importers in those countries to import from India on deferred credit terms as per the terms and conditions already negotiated between Exim Bank and the overseas agency. The Indian exporters can obtain payment of eligible value from Exim Bank against negotiation of shipping documents, without recourse to them.

Features of the Programme
The lines of credit are denominated in convertible foreign currencies/agencies and extended to sovereign governments/agencies nominated by them or financial institutions. Such governments/ agencies/institutions are the borrowers and Exim Bank the lender. Terms and conditions of different lines of credit are varying and details in respect of each line of credit can be obtained from Exim Bank. It would also need to be ascertained from time to time that the lines of credit have come into effect and uncommitted balance is still available for utilization.

How it works

• The buyer arranges to obtain allocation of funds under the credit line from the borrower. The exporter then enters into contract with the buyer, for the eligible items covered under the line of credit. The contracts would need to conform to the basic terms and conditions of the respective credit lines. (Particulars of effective lines of credit are available separately).
  
  
• The delivery period stipulated in the contracts should be such that credit can be drawn from Exim Bank within the terminal disbursement date stipulated under the respective line of credit agreements. Also, all contracts should provide for pre-shipment inspection by the buyer or agent nominated by buyer.
  
  
• The buyer arranges to comply with procedural formalities as applicable in his country and then submits the contract to the borrower for approval. The borrower, in turn forwards copies of the contract to Exim Bank for approval.
  
  
• Exim Bank advises approval of the contract to the borrower, with copy of exporter, indicating approval number, eligible contract value, last date for disbursement, and other conditions subject to which approval is granted.
  
  
• The buyer, on advice from the borrower, establishes an irrevocable letter of credit. A single L/C is to be opened, covering the full eligible value of the contract including freight and/or insurance as laid down in the contract.
  
  
• The letter of credit is advised through a bank in India designated by Exim Bank.
  
  
• Exporter ships the goods covered under the contract and presents documents for negotiation to the designated bank. The Bank forwards negotiated documents to the buyer.
  
  
• On receipt of clean non-negotiable set of shipment documents along with the relative invoices, inspection certificate and a certificate that documents negotiated are as per terms of L/C and without reserve from the negotiating bank and after having satisfied itself, that all formalities have been complied with in conformity with the terms of the Credit Agreement, Exim Bank reimburses the eligible value to the negotiating bank for onward payment to the exporter.
  
  
• Exim Bank debits the borrower’s account and arranges to collect interest and principal receivable on due dates as per the terms of the line of credit agreement between Exim Bank and the borrower.
  
  

It may be noted:

• Any bank charges, commission expenses payable in India as also Service Fee and other charges shall be to the account of the exporter.
  
  
• Exporters should check with Exim Bank, in advance, before finalizing the contract with the buyers, details of service fee and other charges payable by the exporters on the contract to be covered under the lines of credit.
  
  
• Exim Bank will not entertain any claims towards interest charges relating to the period between dates of negotiation and actual reimbursement from Exim Bank.