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Annual Report 2009-10
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| Home : Finance & Services : Lines of Credit | :: LINES OF CREDIT |
CONFIRMATION OF LETTERS OF CREDIT (L/C) BY EXIM BANK UNDER THE GLOBAL TRADE FINANCE PROGRAM (GTFP) OF THE INTERNATIONAL FINANCE CORPORATION (IFC), WASHINGTON DC.
Introduction
The program envisages confirmation of Letters of credit (L/Cs), Standby letters of credit, demand guarantees, promissory notes or bills of exchange denominated in Dollars, Euro, Yen or in other freely available convertible currencies acceptable to IFC, received by Indian exporters from pre-approved banks in the countries of IFC's operation, i.e. Central Asia, Central and Eastern Europe, Latin America & the Caribbean, Middle East & North Africa as also other regions of Asia and Africa. IFC will provide guarantee facility to Exim Bank to cover such L/C confirmation and confirmation of other trade instruments. Flow chart of transaction mechanism involving L/C confirmation is attached.
Features of the Program
- The program currently covers 74 countries of IFC's operation listed below and Exim Bank may confirm the L/Cs & other trade instruments issued by pre-approved banks for supporting India's exports to these countries:
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Afghanistan
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DR Congo
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Mali
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Seychelles
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Albania
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Ecuador
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Malta
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Sierra Leone
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Angola
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Egypt
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Mauritania
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South Africa
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Argentina
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Gambia
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Mauritius
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Sri Lanka
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Armenia
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Georgia
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Mexico
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St. Lucia
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Azerbaijan
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Ghana
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Moldova
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Syria
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Bangladesh
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Guatemala
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Mongolia
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Tajikistan
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Belarus
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Haiti
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Mozambique
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Tanzania
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Benin
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Honduras
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Nepal
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Togo
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Bhutan
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Indonesia
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Nicaragua
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Turkey
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Bolivia
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Jordan
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Niger
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Uganda
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Brazil
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Kazakhstan
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Nigeria
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Ukraine
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Burkina Faso
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Kenya
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Pakistan
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Uruguay
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Burundi
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Kosovo
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Papua New Guinea
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Vietnam
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Cambodia
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Lebanon
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Paraguay
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West Bank
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China
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Liberia
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Peru
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Yemen
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Costa Rica
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Madagascar
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Rwanda
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Zambia
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Cote d'Ivoire
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Malawi
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Russia
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Dominican Republic
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Maldives
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Senegal
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(The list of countries is subject to change)
- Exim Bank’s L/C confirmation will cover the risk of non-payment by the Issuing Bank.
- Eligibility Criteria : The Issuing Bank must be in IFC’s list of pre-approved banks. (List of issuing Banks is attached). Eligible Goods means export of all types of goods and commodities and related cost of selected transport and other services to any one of IFC’s countries of operation and not included in IFC’s exclusion list (exclusion list is attached).
- Pricing : The fee payable to Exim Bank (including fee payable to IFC) for adding confirmation to the L/C will be advised by Exim Bank along with the approval for confirmation of L/Cs and other trade instruments. The fee will be payable before confirmation of instruments by Exim Bank.
How it works
- Under the program, an importer of Indian goods in any of the above countries will approach a bank for opening an L/C. The L/C Issuing Bank should be on IFC’s list of pre-approved banks. Either the L/C Issuing Bank or Indian exporter may request confirmation of the L/C from Exim Bank, as per the attached Application Form. Exporters are welcome to discuss the transaction before sending a formal request for L/C confirmation to Exim Bank.
- Exim Bank will convey availability or otherwise for confirmation of the L/C and, if agreed to confirm, the fee payable by the Indian exporter/ L/C Issuing Bank. L/C will be governed by UCPDC-600.
- L/C Issuing bank shall not, without Exim Bank’s prior written consent, amend the terms of the L/C.
- Indian exporter will ship the goods covered under the contract and shall present the documents for negotiation to his bank. The Negotiating/ Paying Bank will ensure that the documents are as per the terms of the L/C and shall make payment under the L/C to the Indian exporter. The Negotiating/Paying Bank will forward the documents to the L/C Issuing Bank. Negotiating/Paying bank shall keep Exim Bank informed on each disbursement made to the Indian exporter under the L/C and each claim for payment made to the L/C Issuing bank and amount received by the Negotiating/Paying Bank from the L/C Issuing bank in settlement thereof, till retirement of the L/C.
- Exim Bank can also be the negotiating bank.
- In the event the L/C Issuing Bank fails to reimburse the Negotiating/Paying Bank, Exim Bank will pay the Negotiating/Paying Bank as per the terms and conditions of L/C confirmation.
Attachments
For further information please contact
Mrs. Geeta Poojary,
Dy. General Manager,
Export-Import Bank of India,
Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade,
Mumbai 400 005.
Telephone: (022) 2217 2308 / 2217 2327,
Fax: (022) 2218 2460.
E-mail: geeta@eximbankindia.in
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