Module III Dr Jayashri Kulkarni Open Account Advance payment Payment against shipment consignment Documentary Bill LC Methods of payment Most popular Authorisation given by opening bank to ID: 1027472
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1. Export MarketingSEM IV Module IIIDr. Jayashri Kulkarni
2. Open AccountAdvance paymentPayment against shipment/ consignmentDocumentary BillL/CMethods of payment
3. Most popularAuthorisation given by opening bank to negotiating bank that if the exporter presents the relevant set of documents to pay the amount there in.letter of credit
4. Exporter’s RequestImporter’s request to his bank-opening bankIssue L/CReceipt of L/C by ExporterShipment of GoodsScrutiny of documents –Negotiating BankRealisation of paymentDocuments to ImporterProcedure to open
5. Opener--ImporterBeneficiary—ExporterOpening bank—Importer’s bank in his CountryNegotiating bank—Exporter’s Bank in his Country nominated by Opening BankAdvising Bank—Foreign correspondent of opening bankConfirming bank—Bank in Exporter’s Country Guarranting credit on request of opening BankParties to L/C
6. RevocableIrrevocableConfirmedUnconfirmedWith recourse- responsibilty of exporterWithout RecourseRevolvingTransferableNon transferableTypes of L/C
7. Red ClauseGreen ClauseBack to back—domestic L/C Traveller’s Clean L/CStand byDocumentaryFixedTypes of L/C- Contd…
8. Meaning: Packing CreditRBI-,” any loan to exporter for financing the purchasing, processing, manufacturing or packing of goods.”Finance required before shipment of the goods.Pre shipment Finance
9. 1.Eligibility-Export order/Letter of Credit OrLetter from export house2. At Pre shipment stage3.For working capital requirements4. Depositing Irrevocable L/C with fin. Insti.Pre shipment Finance-Features
10. 5.Amt. of Finance-Equal to amt. of Export order6.Period-180 days+ extension frm. RBI-90 days7. Concessional Rate of Int.8.Phased manner disbursal 9. Proper accounts to be maintained10. Repayment immediately after receiving export proceeds/ receiving incentives
11. Meaning: Finance required by an exporter after shipment of goods but before recovery of dues from importerFinance required for working capital requirements after shipment of goods.Post shipment Finance
12. 1. After actual shipping of the goods/export documents are in the name of exporter2.Working capital requirements after shipment of goods but before recovery of dues from importer.3. Shipping documents- evidence4. Various forms of post shipment finance5.Amount-As per requirementsPost Shipment FinanceFeatures
13. 6. Period-Commercial Banks-90 daysEXIM Bank—90 days to 5 yrs/ upto 12 yrs.7. Concessional Int. rate8. Proper accounts to be maintained9.Disbursement in installments10.Used for export purpose only , Otherwise penalty is chargable.Features—contd..
14. Commercial Bank: Fund based assistance:180 days packing credit at pre shipment stage90 days finance at post shipment stage2. Non Fund based assistance:Banks GuaranteeCredit rating for exportersRole of various Financial Institutions
15. Information about foreign exchangeConfirmation of L/CBanks cover the risks of fluctuations in foreign exchange convergence rates.Release foreign currencyNon Fund based assistance by Commercial Banks-contd..
16. FeaturesExport Import BankPublic sector bankStarted on 1st march 1982Medium and Long term loan to exporterPromotion of exports in India.-Fund / non fund based assistanceExim Bank
17. EXIM Bank-Functions/RoleFund based AssistanceNon Fund based Assistanceto Indian Companiesto Foreign Companies/govt.to Indian Commercial banksa. Guarantee of loanb. Advisory services
18. Fund Based assistance:Financial assistance to Indian Companies-De ffered payment termsPre shipment creditOverseas Investment financingAssistance by EXIM bank
19. 2. Financial assistance to Foreign Companies/govtOverseas buyers creditCredit to foreign Govt.Relending to bank overseas3. Financial assistance to Indian Commercial banks: Rediscounting B/E Re finace EXIM—Fund Based assistance-contd..
20. Non fund based assistance:1. Guarantee of loan:2.Advisory services: market research, pricing, merchant bankingAssistance by EXIM bank
21. Original French word For fait –to surrenderThe exporter forfeits / surrenders her right to receive payment to the Forfeiting Agency abroad.EXIM Bank is intermediary between-Exporter, Forfeiting AgencyForfeiting scheme of EXIM Bank
22. Discounting the Bills ReceivableExporter has B/E or Promissory NotesL/C Without Recourse to the Exporter Long term or medium term maturity of billsFinancing up to 100% of the Contract Value.Mechanism for Forfeiting
23. Small Industries Development bank of IndiaEstablished in April 1990.Subsidiary of IDBIPromotion, development of small sectorCoordinator of institutions engaged in developing/ financing small sectorRole of SIDBI
24. Seed Capital a. project Fin. a. Direct DiscountingEquipment Fin. b. ISO b. RediscountingTourism related c. Equipment Fin. SIDBI-Functions/ Role RefinanceDirect AssistanceBills Scheme
25. Export Credit Guarantee Corporation Of India Ltd.July 1957Central Govt.Gives Guarantee to exporters for their loanRisk Coverage for exporter against political & commercial risks Provides information to exporter about credit worthiness of importerECGC
26. What is Export Finance? What are its types?Write a note on Pre shipment Finance.Write a note on Post shipment Finance.Discuss the role of Commercial bank in Export Finance.Discuss the role of EXIM bank in Export Finance.Discuss the role of SIDBI in Export Finance.Discuss the role of ECGC in Export FinanceQuestions
27. What are the types of L/C?What is the procedure for opening and obtaining finance under L/C?Distinguish between Pre shipment Finance and Post shipment Finance.What is counter trade? Explain with example.What are the types of Counter Trade?What are the benefits of Counter Trade?Questions.-Contd…
28. a. Export Finance means Pre shipment Financeb. Term finance means short term loanc. Pre shipment finance means packing creditd. Extension to packing credit is given for 90 dayse. Extension to packing credit does not require permission of RBIf. Post shipment finance is given for 90 daysg. Forfeiting scheme is introduced by EXIM bankObjective questions-True or False