Professional Documents
Culture Documents
MEANING
SOURCES
Process - 1
OPORTUNITY IDENTIFICATI ON
TENDER /PROPOSAL
CONTRACT
PRODUCTION
PAYMENT PERIOD
Process -2
NEGOTIATIONS STRATEGY
PAYMENT TERMS
MANAGING RISKS
Type of Finance
PRE-SHIPMENT FINANCE
POST-SHIPMENT FINANCE
Features:PERIOD OF CREDIT AND RATE OF INTEREST DISBURSEMENT OF PACKING CREDIT ADVANCE MAINTENANCE OF ACCOUNTS,MONITORING AND REPAYMENT
Features of Post-shipment Finance Eligibility Documentary evidence Purpose Amount of Finance Period of Credit and Rate of Interest. Disbursement of post shipment Finance. Maintenance of Accounts, Monitoring and repayment.
Pre-shipment finance
Credit extended to exporters prior to shipment for execution.
Granted for specific purposes. Amount doesnt exceed the FOB value/domestic value-less. Extended to Indian exporters/Deemed exporters. Extended packing credit Loan, packing credit Loan n securing loan.
Post-shipment finance
Credit extended to exporters after shipment for meeting capital.
Extended for meeting WCR. Finance given to extend of 100% of invoice value of goods exported. Extended to Indian exporters and overseas importers. Discounting export bills, against-undrawn balances, retention money,gds on consignment.
6.Period of Credit
Granted for period ranging from 90days to 12yrs depending on nature of exports.
Extended against DE of shipping documents certified by customs. Extended by commercial banks while MT and LT credits given by EXIM bank.
7.Documenta Extended against DE of confirmed export order or LC. ry evidence 8.Lending institutions
Extended by commercial banks of India.
RBI of india performs the following functions in providing export credit at concessional rates to indian exporters:
Administration of interest rates
Administration of rates of exchange,interest and discount. Working groups of bankers Improvement in credit delivery system Liberal refinance facility
General refinance
(A)BANK GUARANTEES:
BID BONDS.
PERFORMANCE GUARANTEE.
GUARANTEE FOR PAYMENT OF RETENTION MONEY. GUARANTEE FOR LOANS IN FOREIGN CURRENCY.
(B)CREDIT-WORTHINESS OF IMPORTERS.
(C)INFORMATION ABOUT FOREIGN EXCHANGE. (D)DOCUMENTS,RULES AND REGULATION. (E)INVOICING IN A FOREIGN CURRENCY.
Mechanics of Forfeiting
Exporter
Current exchanges
Importer
Future exchanges
Forfeiting bank
Importer's bank
Advantages of Forfeiting
The exporter receives the payment immediately.