The trade facilitation programme of the European Bank for Reconstruction and Development (EBRD) envisages confirmation of Letters of Credit (L/Cs) received by Indian exporters from pre-approved banks in the countries of EBRD's operations, i.e. the countries of Central and Eastern Europe and the Commonwealth of Independent States (CIS). EBRD will provide guarantee facility to Exim Bank to cover the confirmation of such L/C.

Salient features:

This programme covers the 27 countries of EBRD's operations listed below and Exim Bank will confirm L/Cs for supporting Indian exports to these countries:
 

Albania	Estonia	Latvia	Slovenia
Armenia FYR	Macedonia	Lithuania	Tajikistan
Azerbaijan	Georgia	Moldova	Turkmenistan
Bosnia & Herzegovina	CzechRepublic	Poland	Ukraine
Belarus	Hungary	Romania	Uzbekistan
Bulgaria	Kazakhstan	Russian Federation	Yugoslavia
Croatia	Kyrgyzstan	Slovak Republic

• Exim Bank's L/C confirmation will cover the risk of non-payment by the Issuing Bank.
• Eligibility Criteria: The L/C Issuing Bank must be in EBRD's list of pre-approved banks. (List of pre-approved banks can be obtained from Exim Bank's Trade Finance Group). Eligible Goods means export of all types of goods and commodities and the related cost of transport and other services to any one of EBRD's countries of operations and not included in EBRD's exclusion list (items in the exclusion list can be obtained from Exim Bank's Trade Finance Group).
• Pricing: The Exim Bank will advise the fee payable to them (Exim Bank) for adding confirmation to the L/C along with the approval for L/C confirmation. The fee will be payable before confirmation of L/C.

How the procedure works:
 

• Under the programme, 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 EBRD's list of pre-approved banks. Either the L/C issuing bank or the Indian exporter may request confirmation of the L/C from Exim Bank. For this purpose, application forms are available with Exim Bank. Exporters are welcome to discuss the transaction before sending a formal request for L/C confirmation to Exim Bank.
• Exim Bank will convey approval for confirmation of the L/C and the fee payable by the Indian exporter/L/C issuing bank. L/C will be governed by UCPDC-500.
• 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 therefore, till retirement of the L/C.
• 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 of approval for L/C confirmation.