Export Finance: Presented By: Tamanna M.FTECH 2010-12 NIFT, Gandhinagar

EXPORT FINANCE
Presented By: Tamanna M.FTECH 2010-12 NIFT,Gandhinagar
Introduction
An exporter may require financial assistance from his bank at both pre shipment and post shipment phases.
While extending such facilities banks are mainly governed by the guidelines issued by the RBI, The Trade and Exchange control Regulations and The international Conventions and codes of the International Chamber of Commerce.
Exporters may get pre-shipment credit (Packing Credit) and post shipment credit(short term) from the Indian commercial Banks and branches of foreign commercial Banks in India and Post shipment credit(Medium/long term) on differed payment terms from commercial banks as well as from Export-Import Bank of India.(Exim Bank).
Pre-shipment Finance:
Packing Credit:
Who can be availed?

Packing credit or pre-shipment credit is available to all types of exporters i.e. Manufacturersexporters, Merchant exporters, Export houses and even to Manufactures of goods who do not receive the export order in their own name, but they supply goods to the merchant-exporters or export houses for overseas sales.
Form of Finance:
Fund based Advance:
It is in the form of domestic currency or foreign currency. The Packing credit in foreign currency is generally is given by the bank on the basis of track record of the exporter .In the foreign currency in which export earning are expected to be received.
Non-fund based advance:

It is in the form of letter of credit.(LC)
Packing credit advance is made available to the exporter for the purpose of purchasing, manufacturing, processing, transporting warehousing, packing and shipping etc. of the goods meant for export.
Advances against Cash Incentives / duty drawback

Where the domestic cost of production of certain goods is high in relation to international price, government may grant some incentives to the exporter so that he may compete effectively in the overseas market. Such advances are clean in the nature and banks may stipulate margin between 20% to 40% as the percentage of incentives differs from time to time as published in government notifications.
Government of India have formulated duty drawback credit scheme in which banks are able to grant advances to exporters against their entitlements of duty drawback on export of goods, free of interest charges the period of advances will be upto maximum 90 days beyond which the bank may not allow the advances or may charge normal interest applicable to export credit.
Post-shipment export advance:

Banks give short term finance to the exporters against the exports receivables up to 120 days. Following are the primary types of the advances Post shipment finances are available at concessional rate to the exporters
Export bills negotiation
Export bills purchase
Export against bills sent for collection
Export bills negotiation

Exporters are required to submit bills and documents after shipment to a bank. If an exporter requests for immediate credit, the bank will scrutinized all the documents required under LC.
These are presented and are drawn in conformity to the terms of LC. Only when the documents are in order and are comply absolutely with all the terms of LC, does the negotiating bank make the payment to the exporter.
Export bills purchase

when the exporter doesnt possess the LC from the importer , he/she if requests the bank to purchase/ discount the documents for receiving immediate payment the bill may be drawn on D/A (documents against acceptance)or D/P(document against payment)basis, depending on the terms of the export contract.
Export against bills sent for collection Exporters send bills drawn on importers on collection basis through a bank when
Under the above circumstances, banks may finance apart of the total bill amount as advance as and when the bill is realized , advance will be carry the same rate of interest, applicable to the post shipment finance.
The documents drawn on the LC contain minor discrepancies but a bank is confident that the buyer will retire documents
The bill purchase limit of the exporter is exhausted and bank is not willing to sanction additional amount
Export under deferred credit facilities

Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred as project exports. Project export programs are generally of high value such contracts should normally provide for payment of a certain portion of the relative invoice value as advance or down payment, the balance being payable in installments over a period of time.
Role of Export Import bank of India

Banks play the role of mediator or a bridge, which links the exporter or importer.
About Export-Import Bank of India The Export-Import Bank of India, also known as Exim Bank of India, is the leading export finance institution in the country. The bank was set up in the year 1982 under the Export-Import Bank of India Act 1981. The Government of India launched the Export-Import Bank Of India with an aim to augment exports from India and also to combine the country's foreign trade and investment with the overall economic growth. The bank began its operations as a supplier of export credit, but has over the period evolved into an institution that plays a major role in partnering Indian Industries including small and medium enterprises.
Export-Import Bank of India Initiatives

Export-Import Bank of India has been one of the prime institutions that encourages project exports from India.
The bank offers wide-ranging services for enhancing the prospect of Indian project exports.
Exim Bank's Overseas Investment Finance program gives a variety of facilities for Indian reserves and acquirements overseas. The facilities consist of direct equity participation by the bank in the overseas venture and non-funded activities by the overseas venture and loan to the Indian companies for equity participation in the venture abroad. As part of Exim Bank's marketing Finance Program, the bank offers support to small and medium enterprises in their export marketing efforts consisting of financing the soft expenditure linking to completion of tactical and systematic export market development plans.
Export-Import Bank Of India Objectives

The primary objective of the Export-Import Bank of India is to provide financial assistance to importers and exporters and function as the top financial institution. Some of the services of the bank include: overseas investment finance, film finance, export credit, finance for export oriented units and agricultural & SME finance. In the period of 2005- 2006 the total amount of loan given out by the bank amounted to 150,389 million, while this figure shot up to Rs. 220,760 million in the flowing year.
Export-Import Bank Of India Foreign Trade

Export-Import Bank of India plays the role of source of finance, promoter, coordinator and consultation to India's Foreign Trade.
The bank is the coordinator of the Working Group Mechanism for the clearance of projects, service exports and deferred payment exports.
This group comprises of Exim Bank and Government of India representatives from the Ministries of Finance, Commerce and external Affairs, Export Credit Guarantee Corporation of India Ltd, commercial banks that are certified foreign exchange dealers and the Reserve Bank of India.
This working group gives clearance to contracts sponsored by Exim Bank or commercial banks and operates as a single window mechanism for clearance of export proposal terms.
Export-Import Bank Of India Address
Centre One Building, Floor 21 World Trade Centre Complex Cuffe Parade, City: Mumbai, Pin: 400 005 State: Maharashtra Phone No.: +91-22-22185272 Fax: +91-22-22182572
List of Export import Bank in India

Axis Bank Allahabad Bank American Express Bank Ltd Andhra Bank ABN AMRO Bank Arab Bangladesh Bank Bank Muscat (S A O G) Bank Of America Bank Of India Bank Of Baroda India
Bank of Maharashtra
Bank of Punjab Bank of Rajasthan Bharat Overseas Bank Barclays Bank PLC Canara Bank India Centurion Bank Ltd ICICI Bank Ltd IDBI Bank Ltd Indian Overseas Bank UCO Bank Vijaya Bank YES BANK India
IndusInd Bank Ltd Citibank Industrial Development Bank Corporation Bank ING Vysya Bank Ltd Cosmos Co-operative Bank Ind Bank Housing Ltd Ceylon Bank Jammu and Kashmir Bank Catholic Syrian Bank JP Morgan Chase Bank DBS Bank Ltd. Karnataka Bank Dena Bank Karur vysya Bank Limited Dhanlakshmi Bank Ltd Kotak Mahindra Bank Deutsche Bank India Lakshmi Vilas Bank Development Credit Bank Lord Krishna Bank Export-Import Bank Of India Mizuho Corporate Bank Federal Bank India North Knara G.S.B. Co-operative Bank Global Trust Bank Ltd Oriental Bank of Commerce HDFC Bank India Punjab and Sind Bank Hongkong Shanghai Banking Punjab National Bank State Bank of Hyderabad Reserve Bank Of India State Bank of Patiala Ratnakar Bank State Bank of Mysore Standard Chartered Bank State Bank of Travancore State Bank Of India State Bank Of Bikaner & Jaipur State Bank Of Indore Syndicate Bank India Bank SBI Commercial The Nainital Bank Ltd. Shamrao Vithal Co-operative Bank Union Bank Of India South Indian Bank United Bank of India Tamilnad Mercantile
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EXPORT FINANCE

Presented By: Tamanna M.FTECH 2010-12 NIFT,Gandhinagar

Who can be availed?

Fund based Advance:

Non-fund based advance:

Advances against Cash Incentives / duty drawback

Post-shipment export advance:

Export bills purchase

Export against bills sent for collection

Export bills negotiation

Export bills purchase

Export under deferred credit facilities

Role of Export Import bank of India

Export-Import Bank of India Initiatives

Export-Import Bank Of India Objectives

Export-Import Bank Of India Foreign Trade

Export-Import Bank Of India Address

List of Export import Bank in India

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