exim bank’s credit to Korea Development Bank

 

A.P. (DIR Series) (2000-2001) Circular No. 21, dated 4-12-2000

Exim Bank’s credit line of US $ 20 million to Korea Development Bank, South Korea

Export Import Bank of India (Exim Bank) has concluded an agreement with Korea Development Bank on May 31, 2000, making available to the latter uncommitted trade finance facility upto US $ 20 million. This credit is available for financing 100 per cent value of export of eligible goods to South Korea. Goods eligible for export under the line of credit are indicated in the list annexed. Eligible goods also include raw materials, agricultural products, marine products, iron and steel products and software.

2.         The broad terms and conditions of the uncommitted trade finance facility are as under :

(a)        The facility has no last dates for utilisation and shall be available until further notice.   Each party shall have the right to terminate the facility without prior notice at any time.

    (b)       The contract shall be expressed in US Dollars.

           (c)       No minimum amount for export of goods under the agreement has been stipulated.

3.       Under the above arrangement the Korea Development Bank will open a letter of credit favouring an Indian exporter which would include a note that it is payable at sight to the beneficiary and that it is to be refinanced for a period of 6 months or 12 months as the case may be. The Korea Development Bank will authorise Exim Bank to accept a time draft drawn on Exim Bank and reimburse to claiming bank in India on behalf of beneficiary of the letter of credit, i.e., Indian exporter will get the proceeds on ‘at sight basis’. The arrangement does not include confirmation of any letter of credit by the Exim Bank, nor does it include the reimbursement confirmation of any letter of credit to any negotiating bank. However, upon request by the Korea Development Bank, Exim Bank may decide to confirm such letter of credit or the reimbursement of such letter of credit. The terms and conditions of such confirmation will be determined on a case by case basis by the Korea Development Bank and the Exim Bank.

4.         The other terms and conditions not specified above, shall be dealt with in accordance with the Uniform Customs and Practices relating to Documentary Credits (UCP 500).

5.       Shipments under the credit will have to be declared on GR/SDF/SOFTEX Forms as usual. All copies of the GR/SDF/SOFTEX Forms should bear a prominent superscription reading ‘Export under Exim Bank Uncommitted trade finance facility dated May 31, 2000, extended to Korea Development Bank’. The number and date of this circular should be recorded in the space provided for. On receipt of full payment of the bills in the manner stated above, an authorised dealer should certify the duplicate copy/ies of the relative GR/SDF/SOFTEX Form/s and forward them to the concerned Regional Office of the Reserve Bank, in the usual manner.

6.       Ordinarily, no agency commission shall be payable in respect of exports financed under the above facility. However, Reserve Bank of India may consider on merits, requests for payment of commission upto a maximum extent of 5 per cent of the f.o.b. value in respect of goods specified in the Annexure, which require after sales service. In such cases, commission will have to be paid in South Korea by deduction from the invoice value of the relevant shipment and the reimbursable amount by the Exim Bank to the claiming bank will be the f.o.b. value minus the commission paid.

Approval for payment of commission should be obtained before the relevant shipment is effected.

7.      Authorised dealers may bring the contents of this circular to the notice of their exporter constituents concerned.

8.       The directions contained in this circular have been issued under section10(4) and section11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999), and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

 

Annexure

List of Eligible goods for finance out of the Credit

Part A

1.     Air compressors

2.     Air conditioning, heating, cooling, fume extraction, dust collection, humidification and ventilation  equipment for industrial use including blowers and exhaust fans.

3.     Alcohol and brewery plant

4.     Aluminium plant and equipment

5.     Asbestos cement machinery

6.     Cement machinery

7.     Cinematographic equipment for motion picture and tele­vision studios.

8.     Chemical and pharmaceutical plant and machinery.

9.     Cigarette making machinery

10.   Coffee processing machinery

11.   Coke oven plant and equipment

12.   Coke oven refractories

13.   Control and Process Instruments including X-ray equip­ment for Industrial Applications

14.   Copper Ore concentration machinery

15.   Dairy equipment and animal feed plant

16.   Earth moving equipment like crawler tractors, shovels, excavators, loaders, dumpers, etc.

   17.   Edible Oil Mill machinery and oil expellers

18.   Electric motors and pumps

19.   Electronic Data Processing equipment

20.   Fertilizer plant and equipment

21.   Flour, rice and dal mill machinery

22.   Food processing plant

23.   Foundry equipment including mould making machinery, Sand and Shot blasting equipment

24.   Freight containers

25.   Garage equipment

26.   Gas and air separation plants

27.   Glass and Ceramic machinery

28.   Heat Exchangers

29.   Integrated Steel Plants (complete or in parts), mini steel plants (electric arc and reduction  furnaces). Re-heating and heat treatment furnaces, Rolling Mills and other finishing lines for  ferrous and non-ferrous metals.

30.   Ice-making machinery

31.   Industrial boilers

32.   Industrial furnaces

33.   Industrial switchboards, control panels, circuit break­ers, air break switches

34.   Jute machinery

35.   Leather tanning and processing machinery

36.   Machine tools

37.   Machinery for manufacturing air conditioners, bicycles, corks, electrical goods, enamel-ware,  hard board, metal contain­ers, radios, razor blades, refractories and bricks, sewing ma­chines,  shoes, steel furniture, wire-ropes and cables etc.

38.   Machinery for manufacturing any product figuring in Part B of this List, not specified separately in  this Part.

39.   Material handling equipment like fork lifts, electric lifts, cranes, hoists etc., and conveyor  systems.

40.   Metal working machinery

41.   Mining machinery

42.   Motor vehicles and chassis, including three-wheelers

43.   Oil drilling rigs

44.   Oil refinery equipment

45.   Packaging and weighing machinery

46.   Pile foundation machinery

47.   Plastic machinery

48.   Power generation, transmission and distribution equip­ment including boilers, generators,  transformers, switchgears, transmission line towers, conductors, cables, sub-station equip­ment  and protective equipment.

49.   Power line carrier communication equipment

50.   Power station structures, hydraulic structures like penstocks, gates and gearings, sub-station structures.

51.   Pressure vessels

52.   Printing and book-binding machinery

53.   Pulp and Paper Mill machinery

54.   Railway electrification equipment and structures and railway signalling equipment

55.   Railway rolling stock including locomotives, wagons, coaches and trolleys.

56.   Rubber machinery

57.   Road and construction equipment including road rollers, tar boilers, continuous batch plants,  stone crushers, asphalt mixers, concrete mixers and vibrators.

58.   Ships, boats, trawlers, steamers, launches, barges

59.   Solvent extraction machinery

60.   Spraying equipment

61.   Steam, diesel and petrol engines

62.   Steel fabrication for bridges, factories etc.

63.   Steel rails and railway track equipment including sleepers, fishplates, points and crossings

64.   Steel shuttering and scaffolding materials

65.   Steel tanks

66.   Sugar (including Khandsari) machinery

67.   Telecommunication and signalling equipment

68.   Textile machinery

69.   Tractors and Trailers

70.   Vending machines

71.   Water supply equipment including pumping plant, large diameter fabricated steel pipes, C.I. spun  pipes and storage tanks, water treatment and sewage treatment plant

72.   Weigh bridges

73.   Welding machinery

74.   Wood working machinery

 

Part B

75.   Agricultural implements

76.   Auto parts

77.   Bicycles, motorcycles, scooters, moped and parts

78.   Construction materials including sanitaryware, tiles and precast cement products, false ceiling,  flooring materials, pipes, decorative laminates, fittings, electricals and steel/aluminium doors and  windows, provided they are exported as separate items and not as items forming part of civil  construc­tion/turnkey projects.

79.   Agricultural chemicals and industrial chemicals.

80.   Pressure cookers, watches and clocks, knitting/sewing machines, vacuum flasks, cutlery, plastic  moulded luggage.

81.   Domestic electric appliances

82.   Drugs and pharmaceuticals

83.   Electrical equipment including low tension insulators, batteries and accumulators, parts of  electrical machinery  and lamps fuses and electrodes for industrial application.

84.   Electronic components

85.   Electronic goods including radios, TV, Public address systems, record players, tape recorders

86.   Fibreglass, PVC  and plastic based products including pipes and tubes, tyre cord

87.   Ferrous/non-ferrous castings, forgings, stampings, extrusions and rolled products

88.   Ferrous/non-ferrous pipes, tubes, sheets, strips, foils, rods, wires, wire ropes

89.   Heating and cooling equipment including air condition­ers, refrigerators, water coolers

90.   Industrial rubber products including tyres and tubes, cots and aprons, conveyor belts, rubber  rollers, hose pipes.

91.   Instruments for measurement, scientific survey and for surgical applications.

92.   Industrial fasteners, bearings, valves, gears and gaskets

93.   X-ray and other electro-medical and other hospital equipments

94.   Office equipments including typewriters, calculators, duplicators, teleprinters

95.   Metal and plastic furniture

96.   Hand tools, cutting tools, grinding wheels, moulds dies

97.   Gas cylinders, fire fighting equipment, photographic equipment, helmets, including fibreglass  helmets.

98.   Any item not included above that might be agreed upon between Exim Bank and Korea  Development Bank.