Export-Import Bank of India (Exim) that recently received refinance worth Rs 5,000 crore by the RBI provides credit to the Republic of Madagascar for the purpose of buying goods and services from India. The bank has extended a line of credit (LoC) amounting to $ 25 million for purchasing goods and services for the two projects.

The two projects for which the bank would extend its help are project for rice productivity and project on fertilizer production. The former project requires funds worth $10 million while the latter would need an investment of $15 million, stated RBI in a notification.

The goods and services included in this agreement would comprise of services which are eligible for export under the Foreign Trade Policy of the Indian government. Even the purchase for which Exim Bank may agree to finance will fall under this category. The agreement would also include consultancy services from India.

The credit line extended by the Exim Bank is valid from December 4th. For the export projects, last date for opening of LoC and disbursement will be 48 months from the scheduled completion date of the contract while in case of supply contracts, this date would be 72 months from the execution date of the credit agreement.

The refinance window by the RBI has helped the bank to be in a position to disburse foreign currency lines of credit to exporters. Exim Bank raises foreign currency funds to support exporters and like others it has also been facing difficulties in the past. The refinance tap available to the bank would prove beneficial to the Indian exporters that recorded an over 10% decline in the month of November.