1. Pre Shipment Finance and types of pre shipment finance .pptx

This document highlights the pre shipment finance and various types of pre shipment finance

1. Name of the Staff : Dr.M.Kowsalya Name of the Department : International Business Subject Name : Export Import Finance Subject Code : 235IB2A3CA Class : II.M.Com (IB) Unit : II Topic : Pre Shipment Finance Dr. N.G.P. ARTS AND SCIENCE COLLEGE (An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore) Approved by Government of Tamil Nadu and Re-accredited by NAAC with ‘A++’ Grade DST – FIST | DBT – Star College Scheme Dr. N.G.P.- Kalapatti Road, Coimbatore – 641 048, Tamil Nadu, India Dr. NGP ASC COIMBATORE | INDIA

2. Pre Shipment Credit Dr. NGP ASC COIMBATORE | INDIA Rupees Pre shipment Credit Finance www.rbi.org.in

3. Process of Pre Shipment Credit Dr. NGP ASC COIMBATORE | INDIA

4. Period of advance Dr. NGP ASC COIMBATORE | INDIA www.rbi.org.in

5. Features of packing Credit Dr. NGP ASC COIMBATORE | INDIA www.rbi.org.in 1. Eligibility 2. Conditions to be fulfilled

6. Features of packing Credit Dr. NGP ASC COIMBATORE | INDIA www.rbi.org.in 3. Disbursement of packing Credit

7. Features of packing Credit Dr. NGP ASC COIMBATORE | INDIA www.rbi.org.in 4. Amount of Finance The nature of order The nature of the commodity The capability of exporter to bring in the requisite contribution Credit Rating of Exporter

8. Features of packing Credit Dr. NGP ASC COIMBATORE | INDIA www.rbi.org.in 5. Period of Credit 6. Rate of Interest Duration – 180 days maximum 270 days Bank may provide a further 90 days extension Revised by RBI time to time Concessional Rate of Interest by RBI

9. Documents required for packing Credit Dr. NGP ASC COIMBATORE | INDIA

10. Categories of packing Credit Dr. NGP ASC COIMBATORE | INDIA https://www.dripcapital.com/en-in/resources/finance-guides/pre-shipment-finance

11. Packing Credit in foreign Currency Dr. NGP ASC COIMBATORE | INDIA Authorized dealers have a permit to offer Pre-shipment Credit in Foreign Currency to with an objective of making credit available to the exporters at internationally competitive price . Pre-shipment Credit in Foreign Currency is given in U.S. Dollars, EURO, and GBP The interest rate on PCFC linked with LIBOR The final cost of exporter must not exceed 0.75% over 6 month of LIBOR https://www.rbi.org.in/commonperson/English/Scripts/Notification.aspx?Id=302#pre1 Sources of Funds Bank in Exchange EFC RFC FCNR

12. Packing Credit in foreign Currency – Interest rate Slab Dr. NGP ASC COIMBATORE | INDIA https ://sbi.co.in

13. Pre shipment credit & Pre shipment credit in foreign currency Dr. NGP ASC COIMBATORE | INDIA PC PCFC Disbursement of amount Amount paid in INR E.g : 7.5 Cr INR Amount sanctioned in FC and Converted in INR for disbursement ($1M*Spot rate @75 INR) E.g : 7.5 Crores INR – Conversion charges Repayment Amount Amount repaid in INR E.g : 7.5 Cr INR Amount repaid based on FX rate E.g : 1M USD X spot dollar rate @ time of repayment (Say Rs. 76). = 7.6 Crores INR Interest Payable Lending rate – subvention rate E.g : 9% - 5% = 4% LIBOR + Spread Rate E.g : 1.5% +2% = 3.5%