The Reserve Bank of India (RBI) has released a new circular on May 16, 2025, informing banks and exporters about a major financial agreement between India and Mongolia. According to the circular, the Export-Import Bank of India (Exim Bank) has signed a deal with the Government of Mongolia to offer a Line of Credit (LoC) worth $700 million (about 5,800 crore rupees). This money will be used by Mongolia to build a crude oil refinery in their country. A crude oil refinery is a facility that processes raw oil into useful products like petrol, diesel, and other fuels. This project is expected to help Mongolia reduce its dependence on imported fuel.  What does this mean for Indian exporters? Indian companies can now export goods and services needed for the refinery project. But only those items that are allowed under India’s Foreign Trade Policy can be exported under this credit line. Exim Bank will decide what goods and services are approved. When does it start and end? The agreement was effective from May 6, 2025. The last date to use the funds is 48 months (4 years) after the scheduled completion date of the refinery project. Important rules for exporters: No commission allowed: Exporters are not allowed to receive any commission for these exports under this credit line. Use of own funds: If exporters still want to pay commission to agents or partners, they must use their own funds or money from their Exchange Earners’ Foreign Currency (EEFC) account, and only after the full payment for the exports is received. Export reporting: All shipments under this credit must be properly declared using official export documents as per RBI rules. Balance Sheet Audit with AI: Transforming Traditional Reviews with Intelligent Automation, Register Today Role of Banks: The RBI has asked all Authorised Dealer (AD) Category-I banks (these are banks allowed to deal in foreign exchange) to: Inform their exporter clients about this opportunity. Guide them to contact Exim Bank for full project and credit line details. Exporters can visit Exim Bank’s office in Mumbai or check their website www.eximbankindia.in for more information. Legal Note: This circular has been issued under the Foreign Exchange Management Act (FEMA), 1999, and exporters must also follow any other rules or laws that apply.

Published Date:2025-05-20