Export Finance Scheme

 

Salient Features:

Scheme is operated in two parts i.e. Part I & Part II. Under Part-I, the finance is given on pre as well as post shipment basis to finance the eligible commodities. Facility is provided on case to case basis.

Under Part-II, an exporter may avail the export finance limit, based on his last year’s export performance in respect of eligible commodities. The limit is available on revolving basis.

Scheme is available for:

• Value added commodities except those mentioned in “Negative List” attached to our Circular No. 35 of 2001
• Direct Exporters  - DE  (those who export directly)
• Indirect Exporters – IDE (those who are the input supplier to Direct Exporters)
• Small, Medium and Emerging Exporters (who reports exported upto equivalent of US $ 2.5 Million in preceding year)
• Trading Companies (who are not the manufacturers)

Rate

Financing rate is determined on the basis of weighted average yield of 6 months T-bill, and subject to revision on monthly basis.

Current rate to be charged by financing banks from exporters is 8.00% (effective from 1^st August 2002)

 

Operations of the scheme  

Part I

• Transaction based Scheme.

• Coverage to the extent of 100% of the Export Order / Contract / LC

• Facility available for both post and pre-shipment stage

• Facility available for:

            -Direct Exporters-180 days

            -Indirect Exporters-120 days

•Performance required: shipment / delivery of eligible goods by DE /IDE.

Documents to be submitted by exporters to banks:

1.  In case of Direct Exporters:

i.  Application /Undertaking on Form “B”

ii.  Demand Promissory Note (D.P. Note) from exporter (on prescribed format)

iii.  Copy of Export Order/LC

2.  In case of Indirect Exporters:

i. Application/Undertaking on Form C

ii. Inland Letter of Credit / Standardized Purchase Order (ILC/SPO). Showing the supply of inputs and the amount involved by the Indirect Exporter to be used by Direct Exporter to execute a specific export order.

iii. Demand Promissory Note (D.P. Note) on prescribed form

Part II

• Annual revolving limit based on half of the previous year export performance in respect of eligible commodities

• Available to Direct Exporters but not to Indirect Exporters

• Monitoring of performance through EF-1 Statement

Pre-requisite Documents

• Duplicate of EE-1, showing exports made in previous year under both parts of eligible items
• D.P Note
• Undertaking

Procedure for EFS

Interested exporter can apply to any scheduled bank for the facility on prescribed form available with banks. After the scrutiny of the documents bank can grant the facility to the applicant.