Forex Dissertation

CONTENTS

1 ) PRE-SHIPMENT EXPORT CREDIT1

1 ) 1Pre-shipment Credit in Foreign Currency (PCFC)1

1 ) 1 . 1Definition1

1 . 1 . 2General1

1 ) 1 . 3Scheme1

1 . 1 ) 4Source of Funds to get Banks2

1 . 1 . 5Spread3

1 . 1 ) 6Period of Credit3

1 . 1 . 7Disbursement of PCFC4

1 . 1 . 8Liquidation of PCFC Account4

1 . 1 . 9Cancellation/Non-execution of Export Order5

1 . 1 . 10Running Bank account Facility for all those Commodities5

1 ) 1 . 11Forward Contracts6

1 ) 1 . 12Sharing of EPC under PCFC6

1 . 1 ) 13Supplies from EOU/EPZ/SEZ Unit to Another EOU/EPZ/

SEZ Unit7

1 . 1 ) 14Deemed Exports7

1 . 1 ) 15Refinance8

1 . 1 . 16Other Aspects8

1 . 2Diamond Buck Account (DDA) Scheme8

2 . POST-SHIPMENT FOREIGN TRADE CREDIT9

installment payments on your 1Definition9

2 . 2Rediscounting of Export Charges Abroad Structure (EBR)9

installment payments on your 2 . 1General9

2 . installment payments on your 2Scheme9

2 . 2 . 3Eligibility Criteria10

2 . 2 . 4Source of On-shore Funds10

installment payments on your 2 . 5Facility of Rediscounting ‘with recourse' and ‘without recourse'11

2 . 2 . 6Accounting Aspects11

2 . 2 . 7Restoration of Limits and Accessibility to Export Rewards

such as EEFC Account12

2 . 2 . 8ECGC Cover12

2 . 2 . 9Refinance12

2 . installment payments on your 10Export Credit Performance

doze

3. GOLDCARD SCHEME FOR EXPORTERS13

some. INTEREST UPON EXPORT CREDIT13

4. 1Interest Rate Structure on Export Credit in Foreign Currency13

*Appendix15

*Index to crucial words16

1 ) PRE-SHIPMENT EXPORT CREDIT

1 . one particular Pre-shipment Credit rating in Foreign Currency (PCFC)

1 . 1 . 1 Explanation

'Pre-shipment credit' means any bank loan or progress granted or any other credit provided by a bank to an exporter for financing the purchase, processing, manufacturing or perhaps packing of goods prior to transport, on the basis of notice of credit opened in his favour or perhaps in favour of some other person, by an overseas buyer or a verified and inapelable order for the foreign trade of goods coming from India or any type of other proof of an buy for foreign trade from India having been positioned on the exporter or some additional person, unless of course lodgement of export purchases or notification of credit rating with the bank has been waived. 1 . 1 ) 2 Standard

With a view to making credit available to exporters at internationally competitive rates, authorised dealers have been allowed to extend Pre-shipment Credit in Foreign Currency (PCFC) to exporters for household and imported inputs of exported products at LIBOR/EURO LIBOR/EURIBOR related rates of interest while detailed beneath. 1 . 1 ) 3 Structure

(i) The system is an extra window intended for providing pre-shipment credit to Indian exporters at internationally competitive mortgage rates. It will be applicable to only funds exports. (ii) The exporter will have the subsequent options to avail of export finance: (a) to avail of pre-shipment credit in rupees and then the post-shipment credit rating either in rupees or perhaps discounting/ rediscounting of export bills underneath EBR Scheme mentioned in paragraph installment payments on your 2 . (b) to avail of pre-shipment credit rating in foreign exchange and discount/rediscounting of the foreign trade bills in foreign currency below EBR System. (c) to avail of pre-shipment credit in rupees after which convert drawals into PCFC at the discernment of the bank. (iii) Selection of currency

(a) The facility may be extended with the convertible values viz. ALL OF US Dollars, Pound Sterling, Japan Yen, Euro, etc . (b) To enable the exporters to obtain operational versatility, it will be to ensure that banks to extend PCFC in one convertible currency in respect of an export order invoiced within convertible foreign currency. For example , an exporter can avail of PCFC in US Dollar against an export order invoiced in Euro. The risk and cost of mix currency purchase will be that of the exporter. (iv) Financial institutions are allowed to extend PCFC for export products to ACU countries. (v) The...

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