RUPEE/FOREIGN EXPORT CREDIT & CUSTOMER SERVICE TO EXPORTERS

1. PRE-SHIPMENT RUPEE EXPORT CREDIT

Rupee Pre-shipme! Cre"i!/P#$%i& Cre"i!
Pre-shipment/Packing Credit is the working capital finance granted to an exporter for
purchase, processing, manufacturing or packing of goods prior to shipment/working capital
expenses towards rendering of services against LCs or confirmed/irrevocable order or an other
evidence of an order for export!
"he period of Packing Credit is to be decided b the #anks based on relevant factors!
$owever, if the finance is not ad%usted b submission of export documents 'i!hi ()* "#+s
from the date of advance, it ceases to &ualif for concessional rate of interest ab initio!
'efinance from '#( is available for a period of 1,* das!
"he facilit ma be released in one lump sum or in stages as per the re&uirement for
executing the orders / LC! )tage wise release accounts ma be maintained depending upon the
tpes of goods/services to be exported! #anks should also keep a close watch on the end-use
of the funds, besides monitoring the progress of execution of the orders!
Li&uidation of the export credit facilit ma be out of the proceeds of the bills drawn thereb
converting the pre-shipment into post-shipment credit! (t can also be li&uidated out of the
balances in the *xchange *arners +oreign Currenc ,/c -**+C ,/c. as also from rupee
resources of the exporter to the extent exports have actuall taken place! (f not so li&uidated/
repaid, banks are free to decide the rate of interest from the date of advance!
"he exporter is permitted to li&uidate the packing credit in excess of the exports due to
wastage, etc! b export bills drawn in respect of b-product like cashew shell oil, etc!
+or the packing credit covering --e.p-r!#/0e portion in respect of export of agro-based
products like tobacco, pepper, cardamom, cashew nuts etc!, banks are re&uired to charge
$-mmer$i#0 r#!e of interest applicable to the domestic advance from the date of advance of
packing credit and that portion of the packing credit would not be eligible for an refinance from
'#(!
"he advance in e.$ess of the export order in respect of $P) groundnut and de-oiled /
defatted cakes is re&uired to be ad%usted either in cash or b sale of residual b-product oil
within a period not exceeding (* "#+s from the date of advance to be eligible for concessional
rate of interest!
#anks would provide operational flexibilit for repament/li&uidation of *PC with export
documents relating to other export order for the same or other commodit exported or the
existing packing credit ma also be marked-off with proceeds of export documents against
which no packing credit has been drawn b the exporter to clients who have a good track
record! "hese relaxations sh-u0" -! /e e.!e"e" to transactions of sister / associate / group
concerns!
1Rui& 2$$-u!3 F#$i0i!+
Pre-shipment export credit facilit in respect of an commodit without insisting lodgement of
/
LC or export orders which should be produced within a reasonable period of time to be decided
b the banks is known as 'unning ,ccount0 +acilit! #anks have been authorised to extend
Pre-shipment Credit 'unning ,ccount0 +acilit in respect of an commodit based on its own
%udgement regarding the need to extend such a facilit sub%ect to the following conditions1-
"he facilit can be extended onl to those exporters whose track record has been good as
also to *xport 2riented 3nits -*23s./ 3nits in +ree "rade 4ones / *xport Processing 4ones
-*P4s. and )pecial *conomic 4ones -)*4s.
Letters of credit / firm orders should be produced within a reasonable period of time as
decided b the banks!
#anks ma mark off individual export bills, as and when the are received for negotiation/
collection, against the earliest outstanding pre-shipment credit on 5+irst (n +irst 2ut5 -+(+2.
basis! 6hile doing so, banks must ensure that export credit available in respect of individual
pre-shipment credit "-es -! &- beond the period of sanction or ()* "#+s from the date of
advance, whichever is earlier!
Packing credit can also be marked-off with proceeds of export documents against
which no packing credit has been drawn b the exporter!
(n case the exporter is found to be abusing the facilit, the facilit should be withdrawn
forthwith! (f the exporters have not complied with the terms and conditions, the advance will
attract $-mmer$i#0 0e"i& r#!e ab initio!
4 'unning account facilit sh-u0" -! be granted to sub-suppliers!
O!her 5#$i0i!ies
#anks are permitted to grant 'upee *xport Packing Credit facilit to exporters having good
track record against advance pament received from abroad b wa of che&ues, drafts, etc!
towards advance paments against exports!
#anks are permitted to grant 'upee *xport Packing Credit to 7anufacturer )uppliers for
*xports 'outed through )"C/77"C/2ther *xport $ouses, ,gencies etc! )uch advances will
be eligible for refinance sub%ect to some conditions including obtaining a letter from the export
house setting the details of the export order, etc!
4 Rupee E.p-r! P#$%i& Cre"i! !- Su/-Supp0iers
Packing credit can be shared between an *xport 2rder $older -*2$. and sub-supplier of raw
materials, components etc! of the exported goods as in the case of *2$ and manufacturer
suppliers, sub%ect to the condition that it $#-! /e made available to 'unning ,ccount facilit.
"he scheme will cover the L/C or export order received in favour of *xport $ouses/"rading
$ouses/)tar "rading $ouses etc! or manufacturer exporters onl! "he scheme should be made
available to the exporters with good track record! #anks ma approach the *C8C for availing
suitable cover in respect of such advances!
4 Rupee Pre-shipme! Cre"i! !- C-s!ru$!i- C-!r#$!-rs
9
"he Packing Credit facilit can be granted to the construction contractors to meet their initial
working capital re&uirements -preliminar expenses. for execution of contracts abroad on the
basis of a firm contract secured from abroad, in a separate account!
"he advances should be ad%usted within ()6 "#+s of the date of advance b negotiation of bills
relating to the contract or b remittances received from abroad in respect of the contract
executed abroad! "o the extent the outstanding in the account are not ad%usted in the stipulated
manner, banks ma charge -rm#0 r#!e of interest on such advance!
4 E.p-r! -5 Ser7i$es
Pre-shipment and post-shipment finance ma be provided to exporters of all the 1)1 !r#"#/0e
ser7i$es covered under the 8eneral ,greement on "rade in )ervices -8,").! ,ll provisions
shall appl mutatis mutandis to export of services as the appl to export of goods unless
otherwise specified! *xporters of services &ualif for working capital export credit -pre and post
shipment. for consumables, wages, supplies etc!
4 E.p-r! Cre"i! !- Pr-$ess-rs/E.p-r!ers-2&ri-E.p-r! 8-es
*xport processing units set up in ,gri- *xport 4ones ma be provided packing credit for the
purpose of procuring and suppling inputs to the farmers so that &ualit inputs are available to
them which in turn will ensure that onl good &ualit crops are raised, besides advantages of
economics of scale!
E.p-r! Cre"i! Isur#$e 9h-0e Tur-7er P#$%i& Cre"i! :ECI;-9TPC<
#anks are eligible to obtain 6hole-"urnover Packing Credit -*C(#-6"PC. for all its packing
credit accounts on pament nominal guarantee fee which is to be borne b the exporters! "he
period of cover is for /9 months! (t gives protection to the banks against losses that ma be
incurred in extending packing credit advances due to protracted default or insolvenc of the
exporter-client! "he coverage is available for banks taking the cover for the first time is :;<
upto 8rade Percentage limit fixed and =;< beond -+or others varies from ;;< to :;<
depending on claim premium ratio of the bank.! +or small exporters/))(3, it is >?<! #anks are
re&uired to submit 7onthl declaration along with premium amount! ,n extension of due date
beond ()* "#+s should be approved b the *C8C!
2. POST SHIPMENT RUPEE EXPORT CREDIT
5Post-shipment Credit5 is the working capital facilit granted or an other credit provided b a
bank to an exporter of goods/services from the date of extending credit after shipment of goods/
rendering of services to the date of reali@ation of export proceeds! ,s per the extant instructions,
the period prescribed for reali@ation of export proceeds is 1= m-!hs from the date of shipment!
Post-shipment advance are made available in the form of -
-i. *xport bills purchased/discounted/negotiated!
-ii. ,dvances against bills for collection!
-iii. ,dvances against dut drawback receivable from 8overnment!
Post-shipment credit is to be li&uidated b the proceeds of export bills received from abroad in
respect of goods exported / services rendered! (t can also be repaid / prepaid out of balances in
A
*xchange *arners +oreign Currenc ,ccount -**+C ,/C. as also from proceeds of an other
unfinanced -collection. bills!
Rupee P-s!-shipme! E.p-r! Cre"i!
"he period of credit can be1-
Bature of bill Period of ,dvance
Cemand #ills Bormal "ransit Period -B"P.D
3sance #ills 7ax! A=; das from the date of
shipment -incl! of B"P.
2verdue bill E Cemand bill
3sance #ill
Bot paid within B"P plus grace
period
Bot paid on due date
D ,verage period involved from date of negotiation/purchase/discount till the receipt of
proceeds in the Bostro account of the #ank!
2"7#$es #&#is! U"r#' ;#0#$es - E.p-r! ;i00s
#anks are permitted to grant advances against the undrawn balances at concessional rate for a
maximum period of >* "#+s provided such remittances are received within 1,* "#+s after
expir of B"P in case of demand bills and due date in case of usance bills! +or the period
beond >? das, the rate of interest specified for the categor 5*CB2)5 -*xport Credit Bot
2therwise )pecified. at post-shipment stage ma be charged!
2"7#$es #&#is! Re!e!i- M-e+
#anks ma consider granting advance against retention mone based on the nature of the
export order like turnke pro%ects, etc! )uch finance is sub%ect to some guidelines as set out b
'#( and listed in the 7! Circular! Bo advances to be granted against retention mone relating to
services portion of the contract!
E.p-r! - C-si&me! ;#sis
*xport on consignment basis should be at par with exports on outright sale basis on cash terms
in matters regarding the rate of interest to be charged b banks on post-shipment credit!
+or pre-shipment finance against the exports of precious and semi-precious stones on
consignment exports, is ad%usted as soon as export takes place, b transfer of the outstanding
balance to a special -post-shipment. account which in turn, should be ad%usted as soon as the
relative proceeds are received from abroad but not later than ()6 "#+s from the date of export
or such extended period as ma be permitted b +oreign *xchange Cepartment, '#(! #alance
in the special -post-shipment. account 'i00 -! /e e0i&i/0e for refinance from '#(.
'#( -+*C. permits on case to case basis longer period up to /9 months from the date of
shipment for reali@ation of proceeds of exports in case of Consignments *xports to C() and
*ast *uropean Countries, Consignment exports to 'ussian +ederation against repament of
)tate Credit in rupees, *xporters who have been certified as 5)tatus $older5 in terms of +oreign
"rade Polic, and Cent percent *23 and units set up under *lectronic $ardware "echnolog
Park, )oftware "echnolog Park and #io-"echnolog Park )chemes! (n case of *xports through
the 6arehouseEcum-Cispla Centers abroad reali@ation of export proceeds has been fixed upto
/; months from the date of shipment!
F
E.p-r! -5 &--"s 5-r E.hi/i!i- #" S#0e
*xport of goods for exhibition and sale are eligible for export finance both pre and post shipment
stages!
P-s! shipme! - De5erre" P#+me! Terms
#anks are permitted to grant Post shipment credit on deferred pament terms for a period
exceeding one ear, in respect of export of capital and producer goods as specified b '#(
-+*C. from time to time!
P-s! shipme! #"7#$e #&#is! Du!+ Dr#'/#$% E!i!0eme!s
Post shipment finance for Cut Crawback entitlements/receivables and covered b *C8C
guarantee is available to exporters at concessional rate and refinance from '#( upto a
maximum period of >* "#+s from the date of advance!
ECGC 9h-0e Tur-7er P-s!-shipme! Gu#r#!ee S$heme
"he 6hole "urnover Post-shipment 8uarantee )cheme of the *xport Credit 8uarantee
Corporation of (ndia Ltd! -*C8C. provides protection to banks against non-pament of post-
shipment credit b exporters to the extent of the loss incurred b the bank/financial institution
upto :;<! The $-s! -5 premium !- /e #/s-r/e" /+ !he /#%s.
3. DEEMED EXPORTS - RUPEE EXPORT CREDIT 2T PRESCRI;ED R2TES
#anks are permitted to extend rupee pre-shipment and post-suppl rupee export credit to
parties against orders for supplies in respect of pro%ects aided/financed b bilateral or
multilateral agencies/funds -including 6orld #ank, (#'C, (C,. and considered as Ceemed
exports!
Packing Credit provided should be ad%usted from free foreign exchange representing
pament for the suppliers of goods to these agencies! (t can also be repaid/prepaid out of
balances in *xchange *arners +oreign Currenc account -**+C ,/c., as also from the rupee
resources of the exporter to the extent supplies have actuall been made!
#anks ma extend rupee pre-shipment credit, and post-suppl credit -for a maximum period
of (* "#+s or up to the actual date of pament b the receiver of goods, whichever is earlier.,
for suppl of goods specified as 5Ceemed *xports5 under the same Chapter of +oreign
"rade Polic from time to time!
"he post-suppl advances would be treated as overdue after the period of A? das! (n cases
where such overdue credits are li&uidated within a period of /G? das from the notional due
date -i!e! before 9/? das from the date of advance., the banks are re&uired to charge, for
such extended period, interest prescribed for the categor 5*CB2)5 at post-shipment stage! (f
the bills are not paid within the aforesaid period of 9/? das, banks should charge from the
date of advance, the rate prescribed for 5*CB2)5-post-shipment!
#anks would be eligible for refinance from '#( for such rupee export credits extended both at
pre-shipment and post-suppl stages!
4. I!eres! R#!e - Rupee E.p-r! Cre"i!
;
6ith effect from ?/!?:!9?/?, interest rates applicable for all tenors of rupee export credit
advances are #! -r #/-7e ;#se R#!e! Prior to the period, it was not exceeding #PL' minus
9!;< per annum!
(f pre-shipment advances are not li&uidated from proceeds of bills on purchase, discount, etc!
on submission of export documents within ()* "#+s from the date of advance, the advances
will cease to &ualif for prescribed rate of interest for export credit #/ ii!i-. )uch credits will be
termed as E.p-r! Cre"i! N-! O!her'ise Spe$i5ie" :ECNOS< and banks ma charge interest
rate prescribed for 5*CB2)5 pre-shipment
(f exports "- -! materiali@e at all, banks should charge on relative packing credit domestic
lending rate plus penal rate of interest, if an, to be decided b the banks on the basis of a
transparent polic approved b their #oard!
ECNOS
#anks are free to decide the rate of interest keeping in view the #ase 'ate/#PL' guidelines in
respect of specified *CB2)! N- pe#0 i!eres! to be charged on *CB2)!
I!eres! R#!es - Pre-shipme! Cre"i!
(nterest rates applicable for all tenors of rupee export credit advances sanctioned on or after
Hul ?/, 9?/? are #! -r #/-7e ;#se R#!e!
Pre-shipment export finance is re&uired to li&uidate from the proceeds of bills on
purchase, discount, etc! on submission of export documents within ()* "#+s from the date
of advance! (n case of non-li&uidation within the period, the advance will cease to &ualif
for prescribed rate of interest for export credit ab initio!
(n cases where packing credit is not extended beond the original period of sanction and
exports take place after the expir of sanctioned period /u! 'i!hi a period of A=? das from
the date of advance, exporter would be eligible for concessional credit -0+ up to the
sanctioned period! +or the balance period, interest rate prescribed for 5*CB2)5 at the pre-
shipment stage will appl!
(n cases where exports do not take place within ()* "#+s from the date of pre-shipment
advance, such credits will be termed as 5*CB2)5 and banks ma charge interest rate
prescribed for 5*CB2)5 pre-shipment from the ver first da of the advance!
(f exports "- -! materialise at all, banks should charge on relative packing credit "-mes!i$
0e"i& r#!e plus penal rate of interest, if an, to be decided b the banks on the basis of a
transparent polic approved b their #oard!
I!eres! - P-s!-shipme! $re"i!
+or earl pament
Bature of bills Pament ,pplicable 'ate
Cemand #ills #efore expir of B"P Prescribed 'ate from date of advance to
reali@ation -credit in Bostro ,ccount.
3sance #ills #efore due date Prescribed rate up to the notional/actual
due date or credit to the bank0s Bostro
account abroad, whichever is earlier,
Cemand #ills/
3sance #ills
(nterest for B"P/
Botional or actual due
date alread recovered
*xcess interest collected, if an, should
be refunded!
=
2verdue bills
-Cemand / usance
bills.
,fter B"P in case of
Cemand bills / upon
expir of Cue date in
case of usance bills
Prescribed rate upto B"P -Cemand
#ills. / Cue date -usance bills. and
overdue period #PL' minus 9!;< upto
/G? das till further notice
I!eres! - P-s! shipme! Cre"i! #"?us!e" 5r-m rupee res-ur$es
(n case *C8C has settled the claim due to non-expatriation of foreign exchange b the
8ovt!/#anking ,uthorities of the importer countries as a result of balance of pament problems
even though the paments have been made locall b the importers, interest rate as applicable
for *C2B2) post shipment to be charged on full amount of advance!
(n case of reali@ation of export receivables subse&uentl in the approved manner, the exporters
ma be refunded the difference in interest recovered and recoverable!
Ch#&e -5 Te-r -5 ;i00
#anks have been permitted to revise the tenor of export bills within the maximum period
prescribed b +*C for reali@ation of export proceeds at prescribed rate of interest! Change of
tenor up to /9 months from the date of shipment has been permitted! #anks can extend the
prescribed rate of interest up to the revised notional due date!
Rupee E.p-r! Cre"i! I!eres! R#!es Su/7e!i-
82( had in past announced interest rate subvention of 9< per annum on rupee export credit
availed b exporters -in 9??:, Cec!9??G, ,pril 9?/?, ,ug! 9?/?, 2ct 9?//, Hune 9?/9,I 7a
9?/A. covering specified categories -*ngineering, textile, and other sectors. of exports sub%ect
to the floor rate should not fall below @A, the rate applicable to agriculture sector lending
without treating it as a violation of #ase 'ate 8uidelines! "he subvention would be reimbursed
b '#( on the basis of &uarterl claims submitted b the banks!
6. EXPORT CREDIT IN FOREIGN CURRENCB
Pre-shipme! Cre"i! i F-rei& Curre$+ :PCFC<
PC+C facilit is granted to exporters in +oreign Currenc for domestic and imported inputs of
exported goods at L(#2'/*3'2 L(#2'/*3'(#2' related rates! "his is an #""i!i-#0 'i"-'
for providing pre-shipment credit to (ndian exporters at internationall competitive rates and
applicable to onl $#sh e.p-r!s!
"he exporter will have the following options to avail of export finance1
"o avail of pre-shipment credit in rupees and then the post-shipment credit either in rupees or
discounting/ rediscounting of export bills under 'ediscounting of *xport #ills ,broad )cheme
-*#'.- dealt separatel!
"o avail of pre-shipment credit in foreign currenc and discount/ rediscounting of the export
bills in foreign currenc under *#' )cheme!
"o avail of pre-shipment credit in rupees and then convert drawals into PC+C at the discretion
of the bank!
"he facilit ma be extended in one of the convertible currencies vi@! 3) Collars, Pound
)terling, Hapanese Jen, *uro, etc! 2perational flexibilit is provided b extending PC+C in one
:
convertible currenc in respect of an export order invoiced in another convertible currenc! "he
risk and cost of cross currenc transaction will be that of the exporter!
#anks are permitted to extend PC+C for exports to ,C3 countries!
"he applicable benefit to the exporters will accrue onl after the reali@ation of the export bills
or when the resultant export bills are rediscounted on without recourse0 basis!
S-ur$e -5 Fu"s 5-r ;#%s/spre#"
#anks are permitted to utili@e the foreign currenc balances available with the bank in *xchange
*arners +oreign Currenc -**+C. ,ccounts, 'esident +oreign Currenc ,ccounts K'+C-C.L
and +oreign Currenc -Bon-'esident. ,ccounts -#anks. )cheme, and the foreign currenc
balances available under *scrow ,ccounts and *xporters +oreign Currenc ,ccounts for
financing the pre-shipment credit in foreign currenc!
(n addition, banks ma arrange for borrowings -Line of credit. from abroad without '#( approval
provided the rate of interest on the borrowing does not exceed 9;? basis points over six months
L(#2'/*3'2 L(#2'/*3'(#2' -w!e!f! /;!//!9?//.! #anks ma also avail lines of credit from
other banks in (ndia in case the are not in a position to raise loans from abroad! #anks are
free to determine the interest rates on export credit in foreign currenc w!e!f! ?;!?;!9?/9!
#anks ma collect interest on PC+C at monthl intervals against sale of foreign currenc or out
of balances in **+C accounts or out of discounted value of the export bills if PC+C is
li&uidated!
Peri-" -5 Cre"i!
"he PC+C will be available for a maximum period of A=? das! ,n extension of the credit will
be sub%ect to the same terms and conditions as applicable for extension of rupee packing credit
and it will also have additional interest cost of =**/ps above the rate for the initial period of 1,*
"#+s prevailing at the time of extension!
+urther extension will be sub%ect to the terms and conditions fixed b the bank concerned and if
no export takes place within A=? das, the PC+C will be ad%usted at "!"! selling rate for the
currenc concerned!
Dis/urseme! -5 PCFC
(n case full amount of PC+C or part thereof is utili@ed to finance domestic input, banks ma
appl appropriate sp-! r#!e for the transaction! #ased on the operational convenience, banks
ma stipulate the minimum lots taking into account the availabilit of resources, etc!
CiDui"#!i- -5 PCFC #$$-u!s
PC+C can be li&uidated out of proceeds of export documents on their submission for
discounting/rediscounting under the *#' )cheme or b grant of foreign currenc loans -CP
#ills. or out of balances in **+C ,/c as also from rupee resources of the exporter to the extent
exports have actuall taken place!
O!her 5e#!ures
G
Packing credit in excess of +!2!#! value, PC+C would be available onl for exportable portion
of the produce!
'epament / li&uidation of PC+C could be with export documents relating to the order or an
other order covering the same or an other commodit exported b the exporter or 'unning
,ccount +acilit for ,ll Commodities
#anks are permitted to extend the 'unning ,ccount0 facilit under the PC+C )cheme to
e.p-r!ers 5-r #00 $-mm-"i!ies, on the lines of the facilit available under rupee credit! "he
facilit ma be extended onl to those exporters whose track record has been good!
(n all cases, where pre-shipment credit 'unning ,ccount0 facilit has been extended!
"he exporters are re&uired to produce the L/Cs or firm orders within a reasonable period of
time!
"he PC+C will be marked-off on the +irst-in-+irst-2ut0 basis! (t can also be marked-off with
proceeds of export documents against which no PC+C has been drawn b the exporter!
'epament / li&uidation of PC+C could be with export documents relating to an
other order covering the same or an other commodit exported b the exporter or amount of
balance in the **+C ,ccount! #ank should satisf the reasons for the substitution of the
order/commodit before entertaining such re&uests!
(n case the exporter is unable to execute the export order for an genuine reasons, the
exporter ma repa the PC+C Loan together with accrued interest b purchasing foreign
exchange from market through the bank! (n such case, the interest is paable on the rupee
e&uivalent of principal amount at the rate applicable to *CB2) at pre-shipment stage plus a
penal rate of interest from the date of advance after ad%ustment of interest of PC+C alread
recovered!
#anks ma remit the fund to the overseas bank in case the PC+C was made available to the
exporter from the Line of Credit obtained from that bank!
#anks ma extend PC+C to such exporters subse&uentl, after ensuring that the earlier
cancellation of PC+C was due to genuine reasons!
F-r'#r" C-!r#$!s
#anks are permitted to allow an exporter to book forward contract on the basis of confirmed
export order prior to availing of PC+C and cancel the contract -for portion of drawal used for
imported inputs. at prevailing market rates on availing of PC+C, besides allowing customers to
seek cover in an permitted currenc of their choice sub%ect to ensuring that the customer is
exposed to exchange risk in the underling transaction!
Sh#ri& -5 EPC u"er PCFC
Like in the case of rupee export packing credit, the PC+C is also allowed to be shared between
an *xport 2rder $older -*2$. and the manufacturer of the goods to be exported!
)upplies from 2ne *23/*P4/)*4 3nit to another *23/*P4/)*4 3nit PC+C ma be made
available to the supplier *23/*P4/ )*4 unit and the receiver *23/*P4/ )*4! "he PC+C
availed b the supplier should be li&uidated with the PC+C being availed b the receiver b
transfer of funds!
>
Deeme" E.p-r!s
PC+C ma be granted for deemed exports0 onl for supplies to pr-?e$!s financed b
multilateral/bilateral agencies/funds for a maximum period of (* "#+s or up to the date of
pament b the pro%ect authorities, whichever is earlier!
O!her 2spe$!s
Bo 'efinance from '#( is available under PC+C!
)urplus of export proceeds available after ad%usting relative export finance and credit to **+C
account sh-u0" -! /e allowed for setting off of import bills!
*C8C cover 'i00 -! /e available for PC+C as the same is in foreign currenc!
+or the purpose of reckoning banks5 performance in extending export credit, the rupee
e&uivalent of the PC+C ma be taken into account!
Di#m-" D-00#r 2$$-u! :DD2< S$heme
3nits engaged in trading of rough or cut and polished diamonds, diamond studded %eweller,
with good track record of at least two ears in import or export of diamonds with an annual
average turnover of 's! A crore or above during the preceding three licensing ears -from ,pril
to 7arch. are permitted to carr out their business through designated Ciamond Collar ,ccounts
-CC,s.!
3nder the CC, )cheme, banks ma li&uidate PC+C granted to a CC, holder b dollar
proceeds from sale of rough, cut and polished diamonds b him to another CC, holder!
P-s!-shipme! E.p-r! Cre"i! i F-rei& Curre$+
Re"is$-u!i& -5 E.p-r! ;i00s 2/r-#" S$heme :E;R<
#anks are allowed to discount the export bills b using its resources available under *xchange
*arners +oreign Currenc ,ccounts -**+C., 'esident +oreign Currenc ,ccounts -'+C.,
+oreign Currenc -Bon-'esident. ,ccounts -#anks. )cheme, and retain them in their portfolio
without resorting to rediscounting! #anks are also allowed to rediscount export bills abroad at
rates linked to international interest rates at post-shipment stage!
#anks ma arrange a E#ankers ,cceptance +acilitE -#,+. for rediscounting the export bills at
B(L margins and dul covered b collaterali@ed documents! "he limits granted to banks b
overseas banks/discounting agencies under #,+ will not be reckoned for the purpose of
borrowing limits fixed b '#( -+*C. for them!
"he )cheme will cover mainl export bills with usance period up !- 1,* "#+s from the date of
shipment -inclusive of normal transit period and grace period, if an.! "here is, however, no bar
to include demand bills, if overseas institution has no ob%ection to it! (n case borrower is eligible
to draw usance bills for periods exceeding 1,* "#+s as per the extant instructions of +*C, Post-
shipment Credit under the *#' ma be provided /e+-" 1,* "#+s! *#' facilit ma be offered
to an convertible currenc and banks are permitted to extend the *#' facilit for exports to
,C3 countries!
F#$i0i!+ -5 Re"is$-u!i& F'i!h re$-urseF #" F'i!h-u! re$-urseF
(n case an ,C is in a position to arrange without recourse0, which is generall not feasible, is
permitted to avail such facilit!
/?
ECGC C-7er
Coverage is available for bills rediscounted with recourse0, and not otherwise!
Re5i#$e
#anks will not be eligible for refinance from the '#( against export bills discounted/rediscounted
under the )cheme!
I!eres! - E.p-r! Cre"i! i F-rei& Curre$+
#anks are free to determine the interest rates on export credit in foreign currenc with effect
from 7a ;, 9?/9!
). CUSTOMER SERVICE 2ND SIMPCIFIC2TION OF PROCEDURES
(n order to address various issues relating to customer service to exporters, '#( had constituted
a 6orking 8roup in 7a 9??;, consisting of select banks and exporters0 organi@ations to
review *xport Credit and the group has made some recommendations which have been
accepted and communicated to the #anks! "he recommendations are listed out in detail in '#(
circular dt! ?/!?:!9?/A -,nnexure /.!
G-0" C#r" S$heme 5-r E.p-r!ers
#eing part of the customer service, a 8old Card )cheme was drawn up! "he )cheme envisages
certain additional benefits based on the record of performance of the exporters! "he 8old Card
holder would en%o simpler and more efficient credit deliver mechanism in recognition of his
good track record! "he salient features of the scheme, among others, are as under1-
*xporters with proven track record including small and medium sectors are eligible for issue of
8old Card b individual banks as per the criteria laid b them!
"he scheme is not applicable to exporters blacklisted b *C8C!
"he exporters are eligible for better terms of credit including rates of interest than those
extended to other exporters b the banks! ,pplications for credit will be processed at norms
simpler and under a process faster than for other exporters!
"he charges are fee-structure under the facilit would be lower than those provided to other
exporters!
#anks ma fix the need based finance factoring the anticipated export turnover and track
record of the exporter!
5(n-principle5 limits will be sanctioned for a period of A ears with a provision for automatic
renewal sub%ect to fulfillment of the terms and conditions of sanction!
, stand-b limit of not less than 9?< of the assessed limit ma be additionall made available
to facilitate urgent credit needs for executing sudden orders!
//
(n case of unanticipated export orders, norms for inventor ma be relaxed, taking into
account the si@e and nature of the export order!
'e&uests from card holders would be processed &uickl b banks within 9; das//; das
and : das for fresh applications/renewal of limits and ad hoc limits, respectivel, etc!
S#$!i- -5 E.p-r! Cre"i! Pr-p-s#0s
"he time frame fixed for sanction of fresh/enhanced export credit limits is within F; das from
the date of receipt of credit limit application! (n case of renewal of limits and sanction of ad hoc
credit facilities, the time taken b banks should not exceed A? das and /; das respectivel,
other than for 8old Card holders! #anks should adopt a flexible approach in disposing of
genuine re&uests for an adhoc facilities!
Bo additional interest is to be charged in respect of ad hoc limits granted b wa of pre-
shipment/ post-shipment export credit!
#anks should simplif the application form and reduce data re&uirements from exporters for
assessment of their credit needs! #anks should adopt an of the methods, vi@! Pro%ected
#alance )heet method, "urnover method or Cash #udget method, for assessment of working
capital re&uirements of their exporter-customers, whichever is most suitable and appropriate to
their business operations!
#anks to provide 5Line of Credit5 normall for one ear -can consider for longer periods upto A
ears. which is reviewed annuall! (n case of dela in renewal, the sanctioned limits should be
allowed to continue uninterrupted and urgent re&uirements of exporters should be met on ad
hoc basis!
#anks should not insist on submission of export order or L/C for ever disbursement of pre-
shipment credit, from exporters with consistentl good track-record! (nstead, a sstem of
periodical submission of a statement of L/Cs or export orders in hand should be introduced!
#anks should ensure that exporters0 credit re&uirements are met in full and promptl at
competitive rates! "he guidelines must be implemented, both in letter and spirit, so as to bring
about a perceptible improvement in credit deliver and related banking services to export sector!
#anks should also address the deficiencies, if an, in the mechanism of deploment of staff in
their organi@ations to eliminate the bottlenecks in the flow of credit to the export sector, etc!
Cr+s!#00iG#!i- -5 E.p-r! /i00s
*xport bills are expected to be reali@ed within /9 months from the date of export! (n genuine
cases, it can be extended! (n case of non-realisation b due date, the outstanding ma be
converted to rupee terms to avoid the exchange rate fluctuations! (n case of default, banks are
expected to lodge *C8C claim for settlement as per guidelines!
Pre-shipme! Cre"i! !- Di#m-" E.p-r!s HIim/er0e+ Pr-$ess Cer!i5i$#!i- S$heme
:IPCS.
(n compliance with the 3B mandated resolution and adopted b (ndia, a new Mimberle
Process Certification scheme came into operation! "he scheme ensures that no rough
diamonds mined and illegall traded enter the countr! ,ccordingl, ever import of diamonds
into (ndia should be accompanied b the Mimberl Process Certificate -MPC.! )imilarl, exports
from (ndia should also be accompanied b the MPC to the effect that no conflict/ rough
/9
diamonds have been used in the process! "he MPCs would be verified/ validated in the case of
imports/ exports b the 8em and Heweller *xport Promotion Council! (n order to ensure the
implementation of Mimberle Process Certification )cheme, banks should obtain an
undertaking in the format provided in the '#( 7! Circular!
-)ource1 '#( 7! Circular dt! ?/!?:!/A.
o?o?o?o?o
/A