In a notification from the Reserve Bank of India, the Export – Import Bank’s (Exim Bank) agreement on Line of Credit (LOC) to the Government of the Republic of Senegal was concluded such that LOC to the latter would be $27.50 million for financing eligible goods, services, machinery and equipment including consultancy services from India for the purpose of rural electrification project in Senegal.
As per the Agreement, out of the total credit extended by Exim bank, 75 per cent of the value of the contract price of the goods and services including consultancy services should be supplied by the sellers from India and the remaining 25 per cent goods and services (other than consulting services) might be acquired by the sellers for the purpose of Eligible Contract from outside India.
The goods and services including consulting services which are eligible for export under Foreign Trade Policy of the Government of India and that for which the purchase may be agreed to be financed by the Exim Bank under this Agreement would be included under the Credit agreement under the LOC.
The Credit Agreement under the LOC was effective from August 24, 2011 and the date of execution of the Agreement was April 21, 2011. The last date for opening of the Letter of Credit and Disbursement for project exports would be 48 months from the scheduled completion date of contracts and that for supply contracts it would be 72 months (April 20, 2017) from the execution date of the Credit Agreement.
Earlier a report from Exim Bank stated that loan linked to G-Secs are likely to gain more popularity in the market but when the liquidity position improves, these loans are usually the first ones to fall.