What is export packing credit?

Packing credit is a type of pre-shipment finance where the exporter is given a loan against an export order before it has been shipped, while post-shipment credit is a type of loan given to an exporter against an export order that has already been shipped.

What is the interest rate of CC loan in SBI?

The effective repo-linked lending rate (RLLR) for CC/ OD customers is 8% now, it said, while for savings deposits above ₹1 lakh the new rate would be 3%. In March, the bank had linked all CC accounts and ODs with limits above ₹1 lakh to the repo rate plus a spread of 2.25%.

How is packing credit liquidated?

How is packing credit/pre shipment finance be liquidated? Normally the packing credit / pre-shipment credit granted to an exporter is liquidated out of proceeds of bills drawn for the exported commodities on its purchase, discount etc., thereby converting pre-shipment credit into post-shipment credit.

How do you get packing credit?

In order to avail packing credit facility, exporter has to submit formal application along with the necessary documentary proof. Exporter is sanctioned a regular packing credit limit based on the assessment of the bank in respect of the credit needs of the exporter.

Who is not eligible for packing credit?

Q. Which of the following person is not eligible for packing credit? merchant exporter.

Is packing credit a term loan?

Due to its self-liquidating feature and customized loans, packing credit enjoys flexible terms. The bank allows the exporter to repay the loan after he receives the final payment and continues to finance all the interim needs of the exporter. Packing credit is essential pre-shipment finance available to the exporters.

Who is eligible for packing credit?

Manufactures and merchant exporters are eligible to avail Rupee Packing Credit at concessional rate of interest.

What is the minimum period for sanction of export packing credit?

Banks sanction packing credit facility initially, for a period of 180 days, subject to the period involved in production cycle. The exporter may seek sanction of extended period of 90 days in case of circumstances, beyond the control of exporter.

How is packing credit used in Export Finance?

ii) Packing credit against hypothecation of goods: Export finance is made available on certain terms and conditions where the exporter has pledgeable interest and the goods are hypothecated to the bank as security with stipulated margin.

Are there standard interest rates for packing credit?

All the banks may not have standard interest rates for packing credit as it varies depending on the business’ nature, borrowing amount, etc. However, it will surely be lower than various standard loans. Due to its self-liquidating feature and customized loans, packing credit enjoys flexible terms.

What’s the interest rate on an export Bill?

Interest to be recovered at 2% over the rate applicable to the cash credit a/c of borrower from the date of advance. Interest recovered earlier at LIBOR related rates to be adjusted. iv) Export Bills (demand and usance) realized after due date but up to date of crystallization. *T&C Apply.

How does packing credit facility work in India?

Packing credit facility can be provided to an exporter on production of the following evidences to the bank: Formal application for release the packing credit with undertaking to the effect that the exporter would be ship the goods within stipulated due date and submit the relevant shipping documents to the banks within prescribed time limit.