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This document provides an overview of export finance concepts and terms. It discusses pre-shipment and post-shipment export finance options available to exporters, including types like packing credit, advance against cheques/drafts, bills purchased/discounted, and advances against various export documents. It also briefly outlines payment terms like letter of credit and factors like parties, operation, and liabilities involved in letter of credit transactions.

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159 views19 pages

Final

This document provides an overview of export finance concepts and terms. It discusses pre-shipment and post-shipment export finance options available to exporters, including types like packing credit, advance against cheques/drafts, bills purchased/discounted, and advances against various export documents. It also briefly outlines payment terms like letter of credit and factors like parties, operation, and liabilities involved in letter of credit transactions.

Uploaded by

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

INDEX
1. 2. 3. 4. 5. Export / Import & Balance of Trade Export Procedure Payment Terms Export Finance Pre Shipment Types of Pre Shipment Finance Banks offering Finance a. Post Shipment Main Features Types of Post Shipment Finance FACTORING a. Characteristics, Types & Advantages FORFAITING LIBOR EXIM Bank of India

6. 7. 8. 9.

1. Export / Import?
What is Import What is Export What is Trade surplus/ Trade deficit.

2. Export Procedure
1. Choosing appropriate mode of operations 2. Selecting the markets 3. Selecting prospective buyers

4. Processing an export order


5. Entering into export contract

6. Export pricing and costing


7. Understanding risks in international trade

3. Payment Terms
Cash In Advance Open Account Consignment Sale Documents Against Payment Documents on Acceptance Letter of Credit (L/C)
Parties to a L/C Operation of L/C Liabilities / Responsibilities of Parties to L/C Types

Letter of Credit (L/C)


Parties to a L/C

4. What is Export Finance?


Export Finance is a short term, working capital finance allowed to an exporter.

Pre Shipment Finance

Post Shipment Finance

3 a. Pre Shipment Finance


Pre - shipment Finance is a loan or advance extended to an exporter by a financial institution for the purpose of execution of an export order

The objective are as follows 1. Procurement of raw materials 2. To carry out production 3. Warehousing 4. Processing & Packing the goods 5. Shipment of goods of the goods to the buyers 6. To cover any additional cost

Types of Pre - shipment Finance

Packing Credit
Types
India Currency (PC) Foreign Currency (PCFC)

Requirements Application Stages


Appraisal and Sanction of Limits Disbursement of Packing Credit Advance Follow up of Packing Credit Advance Liquidation of Packing Credit Advance Overdue Packing

Advance against cheques / drafts


Exporters receive direct payments from abroad by means of cheques /drafts etc. The bank may grant export credit at concessional rate to the exporters of goods track record, till the time of realization of the proceeds of the cheques or draft etc. The Banks however, must satisfy themselves that the proceeds are against an export order

3 b. Post Shipment Finances


Features
Eligibility Purpose Basis Nature Quantum of Funds Tenure

Financing For Various Types of Export Buyer's Credit


Physical exports Deemed export Capital goods and project exports:

Types of Post Shipment Finance


Export Bills purchased/discounted. Export Bills negotiated Advance against export bills sent on collection basis. Advance against export on consignment basis Advance against undrawn balance on exports Advance against claims of Duty Drawback.

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