2.

POST-SHIPMENT EXPORT CREDIT

2.1 Definition
'Post-shipment Credit' means any loan or advance granted
or any other credit provided by an institution to an exporter
of goods from India from the date of extending credit after
shipment of goods to the date of realisation of export
proceeds.

Pre-Shipment Credit in Foreign Currency (PCFC)

1.1.1 Definition

'Pre-shipment credit' means any loan or advance

granted or any other credit provided by a bank to
an exporter for financing the purchase, processing,
manufacturing or packing of goods prior to
shipment, on the basis of letter of credit opened in
his favour or in favour of some other person, by an
overseas buyer or a confirmed and irrevocable order
for the export of goods from India or any other
evidence of an order for export from India having
been placed on the exporter or some other person,
unless lodgement of export orders or letter of credit
with the bank has been waived.

Type of Credit

(i)

Pre-shipment Credit
(a) Up to 180 days
(b) Beyond 180 days and up to 360 days

(ii) Post-shipment Credit

(a) On demand bills for transit period
(as specified by FEDAI)
(b) Against usance bills (credit for total period comprising
usance period of export bills, transit period as specified
by FEDAI and grace period wherever applicable)
Up to 6 months from the date of shipment
(c) Export bills (demand or usance) realised after due
date but up to date of crystallization.
Introduction
Financial assistence is extended by the banks to the exporters at pre-shipment and post-shipment stages.
Financial assitence extended to the exporter priorto shipment of goods from India falls within the scope of
pre-shipment finance while that extended after shipment of the goods falls under post-shipment finance.
While the pre-shipment finance is provided for working capital for the purchase of raw material, processing,
packaging, transportation, warehousing etc.of the goods meant for export, post-shipment finance is
generally provided in order to bridge the gap between shipment of goods and and the realisation of
proceeds.

Export financing: Helping you take your products and business global.

Export financing enables businesses to bring their products all over the world. There are a lot
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Export financing is loans made for the shipping of products outside a country or region. If you
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reduces the risk to a point.

The key point is to make sure your business has a plan that is clear for the potential lenders
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decision about whether to give your company the money or not.

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