Export finance

2. Need for such type of finance?
The institutions which provides the credit,
EXIM BANK
COMMERCIAL BANK
ECGC

3. RBI ensures a free flow of financial assistance
to exporters at a concessional rate of interest
against export order
The commercial banks provide the loan at a
reduced interest
Commercial banks get re-finance facility by
RBI and EXIM bank against the loan extended
by them to the exporters

4. Pre-shipment finance
Post-shipment finance

5. Provides working capital finance to an exporter
Basic purpose is to enable the eligible exporters
to procure raw materials, supplies, process or
manufacture, warehouse or ship the goods
meant for exports

6. Packing credit
Advance against incentives receivables from
govt. covered by ECGC guarantee
Advance against cheque /drafts received as
advance payment

7. Enables an exporter to pack the goods meant
for exports
Includes loan/advance/credit granted by a
bank to an exporter to buy raw materials,
supplies, etc. required for processing,
manufacturing, packing of goods for exports
Facility can be shared with supporting
manufacturer or the sub-supplier

8. Pre-shipment finance is granted for a short
period of time as it is essentially a working
capital finance.
Initially it is 180 days subject to lead time
In case of unforeseen circumstances the bank
may give a 90 days extension
Max. period is 270 days.

9. PERIOD OF CREDIT RATE OF
INTEREST
Upto 180 days not exceeding PLR
minus
2.5 %age points.
180-270 days not exceeding PLR
plus
2.5 %age points.
270-360 days fixed by the bank.

10. Exporter should:
arrange the set of docs as stipulated in the L/C
submit the docs. along with the Standardized Letter
to bank for collection/negotiation of docs.
This letter to the bank provides comprehensive
coverage of the various points

11. This form of finance is available after the shipment of goods
This facility is extended to the exporters in whose name the goods
were shipped OR an exporter in whose name export documents
are transferred.
It can be short term finance or a long term finance depending
upon the nature of export.
It is essentially a working capital finance granted on the strength
of accounts receivables.
This facility is extended only against the shipping documents
which evidence that the goods have been shipped
Credit is extended to finance export receivables for the period
commencing from the date of submission of docs. to the bank to
the date of realisation of export proceeds.
The post shipment credit is essentially a form of fund based
financing
The concessional rate of interest is charged upto a maximum
period of 6 months from the date of shipment of goods

12. Negotiation/Payment/Acceptance of export docs.
under L/C
Purchase/ Discount of export docs under
confirmed orders/ export contracts etc.
Advances against export bills sent on collection
basis
Advances against undrawn balance of exports
Advances against receivables from GOI
Advances against retention money relating to
exports
Advances against approved deemed exports