Export Finance

RIB extend various concessions to boost exports. Some of the concessions Include Cheap credit to exporters. Minimum of 12% of net credit should go to exports. Refinance to Banks on eligible portion of export credit outstanding. EXEC guarantee for export credits No margin requirements for advance against export receivables. Flexible approach to export lending and norms of lending.

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Time norms for disposal of application for export credit. Rejection with the concurrence of next higher authority Bifurcation of WAC limits into loan and c component after excluding export limits. Issue of Gold Card to exporters with good track record. Export credit can be broadly classified into Pre-shipment finance and post shipment finance. Pre-shipment finance refers to finance extended to purchase, processing or packing of goods meant for exports. Financial assistance extended after the shipment of exports falls within the scope of post shipment finance. As loan or cash credit against pledge or hyphenation.

Verification of Exporter-Importer Code No. Issued by GIFT. .Party should not be in the RIB Caution list or EXEC Special Approval List. .Export is not to a listed country . Verify order/LLC . PL on the buyer . Up-to date knowledge of export policy . Commodity should not be In the negative list. .Commodity should have a good market . Terms of contract . No FEM.. Violation -Borrow;ere should be credit worthy. Working capital may be defined as funds required to carry the required level of Current assets to enable the industry to carry on its operations at the expected levels 1 OFF Gross working capital – represented by

Current Assets Inventory Receivables Cash Other current assets Working capital gap – represented by Current assets less other current liabilities Bank borrowings excluded Net working capital – represented by Current Assets less Current liabilities NC – also called the liquid surplus NC – comes from long term sources Promoters’ margin / Others Existing NC – an important indicator of the strength of liquidity Current assets Current liabilities Cash, Bank Balances and other resources that are reasonably expected to be realized or consumed within one year of the date of the Balance sheet Operating Cycle