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Export Finance

The document discusses pre-shipment and post-shipment export finance. Pre-shipment finance is a short-term working capital facility provided to Indian exporters for procuring, manufacturing, processing, packaging, and warehousing goods meant for export. Post-shipment finance fulfills the credit needs of exporters after shipment until payment is received, and can be short or long-term depending on the export. Both types of export finance are sanctioned based on documentary evidence like export orders or shipping documents, and can be fund-based or non-fund based.

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96 views3 pages

Export Finance

The document discusses pre-shipment and post-shipment export finance. Pre-shipment finance is a short-term working capital facility provided to Indian exporters for procuring, manufacturing, processing, packaging, and warehousing goods meant for export. Post-shipment finance fulfills the credit needs of exporters after shipment until payment is received, and can be short or long-term depending on the export. Both types of export finance are sanctioned based on documentary evidence like export orders or shipping documents, and can be fund-based or non-fund based.

Uploaded by

geetsahani
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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EXPORT FINANCE

PRE-SHIPMENT FIANACE MEANING: Also known as packaging credit, it is the financial credit facility needed by exporters before shipment. NATURE: It is basically a short term or working capital finance. PURPOSE: It is provided for Procuring /Manufacturing/ Processing/Packaging/Warehou sing/shipping the goods meant for export. BENEFICIARY: It is available only to Indian Exporters or suppliers of goods.

POST-SHPMENT FIANACE

MEANING:- It is Financial Credit facility needed by exporters after the shipment of goods. NATURE: It can be a short term or a long-term finance depending on the nature of export. PURPOSE: It is provided to fulfill the credit needs of exporters during the period from shipment of goods to receipt of payment. BENEFICIARY: It is available to Indian as well as overseas clients. It can be either sellers credit or buyers credit.

DOCUMENTARY EVIDENCE:IT is sanctioned against the documentary evidence of confirmed export order or letter of credit. FORM OF FINANCE: It may be in the form of fund-based or non fund based finance. AMOUNT: The amount of credit depends on the value of exports order and the exporters credit rating done by the bank. PERIOD OF CREDIT: The maximum period is 180 days. LENDING AUTHORITY:Preshipment finance is generally provided by commercial banks in India.

DOCUMENTARY EVIDENCE: It is provided against the evidence of shipping documents attested by the customs authorities. FORM OF FINANCE: It is generally fund based finance. AMOUNT: The amount depends on the type area value of goods it may be Rs. 10 Crores or more. PERIOD OF CREDIT: The period extends to 90 days. If the loan is for medium or long term, the rate of interest is as per the directives of RBI. LENDING AUTHORITY: Short- term post-shipment finance is granted by commercial banks whereas medium and long term finance is provided by the EXIM Bank.

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