Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 60
August 11, 1994 

All Authorized Dealers
In Foreign Exchange,

Dear Sirs,


Attention of the Authorized Dealers is invited F.E. Circular No. 18 dated the 17th February, 1994, on the above subject.

2. In suppression of the instructions constrained in the above F.E. Circular, it has been decided to permit the Authorized Dealers to open letters of credit/register the contracts (the term "contract" includes indents/proforma invoices/purchase orders) against proforma invoices/order issued by the foreign suppliers or indents issued by indentures duly registered as importers under Registration (Importers and Exporters) Order, 1993, provided the indents bear the registration number of the indenture concerned.

3. The procedure for imports by public sector agencies which are provided foreign exchange allocation to meet their import requirement will be the same as outlined in F.E. Circular No. 54 dated the 11th July, 1993.

4. In terms of para 2.5 of the Import Policy Order issued by the Ministry of Commerce vide Notification No.736(I)/94 dated the 26th July, 1994, letters of credit can be opened for a period upto 12 months while in respect of machinery and mail-work which are required to be specifically fabricated and the period of manufacture is more than 12 months, this period is upto 24th months. The condition of extension of letters of credit within the validity of the letter of credit imposed vide F.E. Circular No. 100 dated that 21st December, 1992 is hereby waived in so far as extensions within the initial 12/24 months period are concerned. The Import letters of credit beyond the initial period of 12/24 month mentioned above for a further period of 24 months/36 months in the case of items other than machinery / mill-work and "machinery and mill-work respectively provided request for extension is received within the initial period of 12/24 months, on payment of revalidation charge @ 0.25% for each 6 monthly period on the un-utilized value of letters of credit. The revalidation charges will payable for the period commencing after the expiry of initial 12/24 months period mentioned above. The goods will be released by the Custom authorities in cases where import has been made within the initial 12/24 months period without any certificate from the L/C-opening bank while release of goods imported during the extended period will be subject to production of bank certificate in the format attached hereto as Annexure 'A'.

5. Please bring the above to the notice of your constituents.

Encl: As above.

  • Annexure 'A'


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