The value of the contract shall be expressed in US dollars. All disbursements under the credit shall be made under letters of credit opened by banks in Sri Lanka, RBI said in notification issued to authorised dealers.
All letters of credit will be advised by banks in Sri Lanka to the State Bank of India, New Delhi, for onward transmission to the exporter/s either direct or through another bank in India, if any, nominated by the exporters.
The Centre has extended a line of credit of US $31 million to the government of Sri Lanka under a credit agreement entered into between the two governments on July 3, 2002. The credit of US $31 million will be available to the Government of Sri Lanka for importing from India up to three lakh tonne of wheat or any other item as may be mutually agreed to between the two governments.
However, the credit will not cover third country imports.
The export of wheat from India and their import into Sri Lanka under the line of credit shall take place through normal commercial channels and will be subject to the laws and regulations in force in both the countries.
All contracts would be subject to the approval of the Centre and the government of Sri Lanka or any agency authorised for this purpose by the Government of Sri Lanka and shall contain a clause to that effect.