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Chapter 7.export finance
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Chapter 7.export finance

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  • 1. Exporters need finance both at the pre – shipment stage &at the post – shipment stage. The finance required to meetvarious expenses before shipment of goods is called as pre – shipment finance or “packing credit”. The finance whichis provided by banks after shipment of goods comes under post – shipment finance
  • 2. • Purpose• Eligibility• Documentary evidence / security• Form / methods of pre shipment finance• Amount of Packing Credit• Period of Packing Credit• Rate of Interest• Loan Agreement• Maintenance of Accounts• Disbursement of Loan• Monitoring the use of advance• Repayment
  • 3. • Purpose• Eligibility• Documentary evidence• Forms of post shipment finance• Amount of post shipment finance• Rate of interest• Loan Agreement• Maintenance of Accounts• Disbursement of Loan Account• Monitoring the use of advance
  • 4. • Application• Processing of Application• Sanctioning of loan• Loan agreement• Loan disbursement• Maintenance of accounts• Monitoring of accounts• Repayment
  • 5. • Fund based assistance At the pre – shipment stage At the post – shipment stage• Non – fund based Assistance Bank guarantee Advisory & other Services
  • 6. • Fund based assistance • Negotiation with overseas buyer Assistance to Indian Exporters • Obtaining indicative discounting Assistance to Indian commercial Quote banks • Finalizing the contract Assistance to overseas buyers • Obtaining firm forfating quote• Non - Fund based assistance • Obtaining avalized promissory Guarantees and Bonds notes / bills of exchange Advisory & other services • Submission of Notes • Forwarding of Notes • Collection of Amount
  • 7. • Payment in Advance• Open Account• Payment against shipment or Consignment• Documents against payments• Documents against acceptance• Letter of credit
  • 8. • Size of the Order• Competitors Credit terms• Financial position of the exporter• Exchange and import controls in the importing country• Nature of product• Creditworthiness of the buyer• Economic situation in the importer’s country• Relations
  • 9. • Exporters request  To exporter : • Reduction in Bad debts• Importers request to his Banks • No blocking of funds• Issue of LC • Clearance of import regulations •• Receipt of LC Free from liability • Pre – shipment finance• Shipment of Goods • Non – refusal by importer• Scrutiny of Documents  To importer : • No blocking of funds• Realization of payment • Delivery on time• Documents to importer • Better relations • Better terms of trade • Sure of shipment of goods • Overdraft facility