Who is eligible for post shipment credit?
First, the applicant has to be an Indian exporter with a proven track record. The credit amount should be within the maximum permissible bank finance (MPBF) of the borrower’s limit. A margin of around 10% under post-shipment credit is applicable. Adequate security might be required in some cases.
What is the period of post shipment finance?
In line with this relaxation, it has been decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from one year to 15 months, for disbursements made upto July 31, 2020.
What is pre and post shipment credit?
1 Meaning: Pre-Shipment finance refers to the credit extended to the exporters prior to the shipment of goods for the execution of the export order. Post-Shipment Finance Post-shipment finance refers to the credit extended to the exporters after the shipment of goods for meeting working capital requirement.
What are the types of post shipment credit?
Types of post-shipment credit
- Export bills purchased/discounted/negotiated.
- Advances against bills for collection.
- Advances against duty drawback receivable from government.
- Advance against export on consignment basis.
- Advance against undrawn balance.
Why post shipment credit is required?
Post shipment credit is extended to exporters by bank with low interest rate till realization of their export proceeds. Post shipment loan helps exporters to get finance without waiting amount of sales from their overseas buyers.
What do you mean by post shipment?
Post-shipment finance (short-term) refers to the credit extended to the exporters after the shipment of goods for meeting working capital requirement. It is given by the commercial banks after the shipment of goods and submission of commercial documents to them for negotiation or collection.
How do I check my packing credit limit?
Upon submission of the documents and establishing their credibility, the bank takes a call on the amount of credit they will provide you. Generally, banks have a Packing Credit Limit of up to 20 to 25% of your total annual sales on your balance sheet.
What are the features of post shipment credit?
Features Of Post-shipment Finance
- Loans up to Rs. 10 crore are provided to the exporter by the commercial bank, which you can easily refinance from the EXIM Bank.
- Loans above Rs.
- Loans above Rs.
- Trading houses.
- Manufacturers that supply goods to Export Houses (EH), Trading Houses (TH) or merchant exporters.
What is post-shipment export credit?
Postshipment finance can be off short terms or long term, depending on the payment terms offered by the exporter to the overseas importer. In case of cash exports, the maximum period allowed for realization of exports proceeds is six months from the date of shipment.
What is the purpose of packing credit?
The basic purpose of Packing Credit Finance is to enable the exporter to procure, process, manufacture or store the goods for export. Packing credit refers to the credit granted by bank to an exporter to enable him to pack the goods. This is short-term working capital advance.
What is post shipment export credit?
Post shipment credit is a loan or advance granted or any other credit provided by the Bank for export of goods/services from India. For demand bills, the period of advance will be the Normal Transit period (as specified by FEDAI).
What is packing credit limit?
Packing Credit Limit (PCL) is provided to an exporter for financing the purchase, processing, manufacture or packing of goods prior to shipment /working capital expenses. Period of the facility is based on Export Cycle up to 6 months(180 days)