Facilities for

Exporters
and
Importers
 Exports
RBI and DGFT
RBI controls Foreign Exchange and DGFT (Directorate General of Foreign Trade)
controls Foreign Trade.
Exim Policy as framed in accordance with FEMA is implemented by DGFT.
DGFT functions under direct control of Ministry of Commerce and Industry. It
regulates Imports and Exports through EXIM Policy.
On the other hand, RBI keeps Forex Reserves, Finances Export trade and
Regulates exchange control. Receipts and Payments of Forex are also handled
by RBI.
IEC – Importer Exporter Code (10-digit code)
One has to apply for IEC to become eligible for Imports and Exports.
DGFT allots IEC to Exporters and Importers in accordance with RBI guidelines
and FEMA regulations.
EXIM Policy is also considered before allotting IEC.
 Export Declaration Form
All exports (physically or otherwise) shall be declared in the following
Form.
➢(i) EDF Form: Exports other than software made by all modes.
➢(ii) SOFTEX Form: Export of software in non-physical form.
 For Realisation of Export Bills
▪ The amount representing the full export value of
goods/software/services exported shall be realised and repatriated to
India within nine months from the date of export.
▪ where the goods are exported to a warehouse established outside
India with the permission of the Reserve Bank, the amount
representing the full export value of goods exported shall be paid to
the authorised dealer as soon as it is realised and in any case within
fifteen months from the date of shipment of goods;
▪ In view of the outbreak of pandemic COVID – 19, the period of
realization and repatriation of export proceeds had been relaxed from
9 months to 15 months from the date of export, for the exports made
up to or on 31st July 2020.
 Prescribed Time limits
The time norms for export trade are as under:
➢Submission of documents with “Exchange Control Copy” to AD within 21
days from date of shipment.
➢No time limit for SEZ (Special economic zones) and SHE(Status Holder
Exporters) and 100 EOUs ( Export Oriented Units).
➢After expiry of time limit, extension is sought by Exporter on ETX Form.
➢The AD can extend the period by 6 months. However, reporting will be
made to RBI on XOS Form on half yearly basis in respect of all overdue bills.
➢AD banks must submit the completed Form XOS to the RBI within 15 days
from the end of the respective half-year period.
Write off of Unrealized Export Bills
➢● The exporter can self write-off up to 5% of the
Exports realized in the last calendar year.
➢● An SEZ Unit or a Status Holder Exporter can self
write-off up to 10% of the Exports realized in the last
calendar year.
➢● Apart from the above Self write-off by the
exporters, AD Bank can write-off up to 10% of the
Exports realized for the captioned exporter in the last
calendar year.
➢● The provision to write-off is reckoned on cumulative
basis.
 DDA (Diamond Dollar accounts)
➢DDA accounts can be opened by exporters/importers of rough and
polished diamonds, facilitating transactions in USD.
➢Eligibility: Firms with at least 2 years of experience in
importing/exporting diamonds, colored gemstones, or plain gold jewelry,
and an average annual turnover of ₹3 crore or more during the preceding
three licensing years (April–March) are eligible to open a DDA.
➢DDA is a non-interest-bearing current account maintained exclusively in
US Dollars.
➢An eligible exporter can open and maintain up to 5 Diamond Dollar
Accounts with AD Category-I banks.
➢Monthly statements of all DDA transactions must be reported to RBI
within 10 days from the end of the reporting month.
EEFC ▪ 100 % of eligible foreign-exchange earnings can be retained in an EEFC account with
an authorised dealer
▪ Forex receipts from a 100 % EOU / EPZ / STP / EHTP (or a unit supplying to an SEZ)
are fully creditable, Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park
▪ Counter-trade proceeds cleared under FEM (Export of Goods & Services) Regulations
2015 qualify for EEFC credit
▪ Startup export receipts recognised via G.S.R. 127(E) dated 19-Feb-2019 may be
parked in EEFC without conversion, Gazette Notification of Statutory Rules
▪ Disinvestment proceeds from ADR / GDR conversions under Depository Receipt
Scheme 2014 are eligible credits
▪ Current-account debits must comply with FEM (Current Account Transactions) Rules
2000 before release from EEFC
▪ Capital-account debits follow the Permissible Capital Account Transactions
Regulations 2000 thresholds
▪ Customs-duty payments permitted under the Foreign Trade Policy 2023-28 can be
debited directly from EEFC Press Information Bureau
▪ Once funds are withdrawn in rupees, 0 amount can be re-credited to the EEFC
balance thereafter
▪ Resident exporters may add relatives as joint holders; ‘relative’ follows section 2(77)
of the Companies Act 2013
EDF Waivers
➢● Trade samples and publicity material sent free of cost.
➢● Gift where export value is not more than Rs. 5 lakhs.
➢● Goods imported free of cost on re-export basis.
➢● Goods sent on repairs and replacements & re-import.
➢● Goods sent for testing purposes with an intention to re-import.
➢● SEZ Units re-exporting defective goods imported from foreign suppliers & collaborators.,
➢● Trade fair and exhibitions purposes.
➢● Status holders/SEZ Units can avail GR Waiver certificates up to 2% of the average annual
export realizations during preceding 3 licensing years.
➢● Exporters in the Gems & Jewellery, Articles of Gold & precious stones sector – Rs. 1 Crore or
up to 2% of the average annual export realizations during the preceding 3 licensing years
whichever is lower.
➢● Pharma companies – 8% of average annual export realizations during the preceding 3
licensing years.
➢● Other Categories of Exporters should approach RBI through their AD Banks for issuance of
EDF Waiver.
Set off of Export receivables against
Import payables
➢● Exporters are eligible to set off Imports bills & Export bills subject to
such transactions as per the FTP in force and compliance with
EDPMS/IDPMS rules.
➢● Both export and the import leg should have taken place during the
same calendar year and through the same AD Bank.
➢● Set-off of export receivables against goods shall not be allowed against
import payables for services and vice-versa.
➢● Overseas buyer and supplier should be same and consent from both the
counterparts should be obtained and kept on record. Settlement within
the same group/associates companies not permitted.
Netting of Export receivables
against Import payables
➢● Exporters located in the SEZ Units are eligible to net off export
receivables against import payables.
➢● Allowed for both goods & services. (same Indian entity & Overseas
buyer/supplier)
➢● Netting may be done on the date of the Balance Sheet of the SEZ Unit.
EDF will be released only after entire export proceeds have been
adjusted.
➢● AD Bank to be satisfied on the documentary evidence - both Imports
and Exports viz., CA certificate for outstanding receivables and payables)
➢● Documentary evidence for both Goods and services to be submitted.
 Pre-shipment Finance or Packing Credit
As aforesaid, pre-shipment finance generally known as Packing Credit Loan
(PCL) or Export Packing Credit (EPC), is essentially a working capital
advance allowed for the specific purpose of procuring/
processing/manufacturing of goods meant for export.
Pre-sanction
1. The borrower is bank’s customer.
2. They should have Exporter-Importer Code number (IEC) allotted by
Director General of Foreign Trade.
3. Their name should not appear under the caution list of RBI.
4. They should not be under the Specific Approval list of ECGC.
5. They have the capacity to execute the order within stipulated time and
have a confirmed/ firm export order or Letter of Credit for export of
goods.
6. All ‘Know Your Customer’ guidelines should be complied with.
 Pre-shipment Finance or Packing Credit
7. The export credit limit should be commensurate with the expected turnover
as well as cost of inputs.
8. The total period sanctioned should be as per the manufacturing cycle or the
operating cycle of the goods being manufactured.
9. Normally the total period of PCL should not exceed 180 days, and should be
in sync with the operating cycle of the exporter. Banks can grant extensions
beyond 180 days up to 360 days, based on their assessment and need of the
customer. Any extension beyond 360 days, would cease to qualify for
concessional rate of interest to the exporter, ab initio.
10. The Rate of Interest is linked to the Benchmark Marginal Cost of Funds
based Lending Rate (MCLR) effective 1st April 2016.
11. Banks may adopt a flexible attitude with regard to debt-equity ratio, margin
and security norms but there should be no compromise in respect to viability
of the proposal and the integrity of the borrower.
12. Exporter’s credit requirements at pre- and post-shipment stages are to be
considered in total.
 Pre-shipment Finance or Packing Credit
Post-sanction
1. No PCL has been availed by the exporter against the same order/LC from any other bank. For
this reason, the Bank which has granted the Pre-Shipment facility should note the details of
its sanctioned pre-shipment credit facility on the reverse side of the original LC or original
Contract so that it is an alert to any other bank which is handling the exporter’s documents.
2. Bank should call for Credit Report/Status Reports on the foreign buyers.
3. The exporter should submit stock statements for the goods on which PCL has been allowed.
4. If the exports are covered under letters of credits, banks would need to be satisfied about
the standing of the credit opening bank.
5. Banks should be aware of the regulations, the political and financial conditions of the buyer’s
country.
6. Wherever advances are covered Export Credit Insurance Banks – Whole Turnover Packing
Credit/ Whole Turnover Post Shipment Turnover (ECIB-WTPC/ ECIB-WTPS) of ECGC, after
sanctioning of credit limits, the disbursing branch should inform ECGC the details of limits
sanctioned in the prescribed format within 30 days from the date of sanction.
7. The pre-shipment advance should be liquidated on submission of relative export bills, by way
of allowing post shipment finance against those bills.
Post Shipment Finance
Post shipment finance is made available to exporters
on the following conditions:
➢IEC accompanied by prescribed declaration on
Softex/EDF form must be submitted.
➢Documents must be submitted by exporter within 21
days of shipment.
➢Normal Transit Period is 25 days.
➢The margin is NIL normally. But in any case, it should
not exceed 10% if LC is there otherwise it can be up
to 25%.
Type of Loan for pre-shipment credit:
1. To purchase of foreign currency demand bills
2. To discount of foreign currency usance bills
3. Advance against duty draw back claims
In Demand bills Normal Transit Period fixed by FEDAI is 25 days.
What is NTP?
Time period from date of purchase of bill to date of credit into NOSTRO
account of the bank is known as Normal Transit Period.
 Post Shipment Finance
What is the time period for Usance bills discounting in post shipment
credit?
For warehouse exporters it is 15 months and for other exporters it is 9
months.
For calculation of due date of the bill, normal transit period should be
added in usance time period
Exp. Usance time period: 60 days
NTP: 25 days
Due date= 60+25= 85 days
 Discrepancies of Documents
➢Late Shipment
➢LC expired
➢Late presentation of shipping documents
➢Bill of Lading not signed properly
➢Incomplete Bill of Lading
➢Clause Bill of Lading
➢Short Bill of Lading or Inadequate Insurance
 Advance against Duty Drawback
➢Duty drawback is the support by Government by way of refund of
Excise/Custom duty in case the domestic cost of the product is higher
than the Price charged from the importer.
➢This is done to boost exports despite international competition. Bank
can make loan to exporter against Duty Drawback.
 Crystallization of Overdue Bills
➢Conversion of Foreign Exchange liability into Rupees is called
crystallization.
➢It is done on 30th day after notional due date at prevailing TT buying
rate.
➢TT (Telegraphic Transfer) buying rate indicates the rate at which bank
convert foreign inward remittances to INR.
➢TT Selling rate indicates the rate at which the bank sends an outward
remittance through telegraphic transfer.
 Gold Card Scheme
▪ Eligibility: SME exporters with continuous export performance over past 3 years.
▪ Validity of Gold Card: Issued for a period of 3 years, renewable upon review.
▪ Credit Limit: Minimum sanctioned limit of ₹25 lakh for Gold Card holders.
▪ Processing Time: Export credit applications under the scheme processed within 25
days.
▪ Enhanced Limits: Gold Card holders eligible for an additional standby limit up to
20% of sanctioned limit.
▪ Interest Rate Benefit: Interest concessions typically around 0.25% to 0.5% lower
than regular rates.
▪ Pre/Post Shipment Credit: Flexible credit period typically extending up to 360 days.
▪ Collateral Requirements: Reduced margin requirements by about 10% compared
to normal exporters.
▪ Renewal Timeline: Review and renewal of Gold Card status at intervals not
exceeding 3 years.
▪ Banking Review: Performance evaluation conducted by bank every 12 months to
maintain eligibility.
 FORFAITING SERVICES

Forfaiting- a financial
transaction involving
the purchase of receivables
from exporters by a
forfaiter. The forfaiter takes
on all the risks associated
with the receivables but
earns a margin.
Advantage of Forfaiting-
(a) Forfaiting provides 100 per cent financing - without recourse and not occupying exporter's
credit line. That is to say once the exporter obtains the financed fund, he will be exempted from
the responsibility to repay the debt.
(b) Forfaiting improves cash flow of the exporter - by converting receivables into current cash
inflow and it is beneficial to the exporter to improve his liquidity and his ability to improve
further the fund raising capability.
(c) Forfaiting saves administration cost - by using forfaiting, the exporter will be freed from
the management of the receivables. The relative costs, as a result, will be reduced greatly.
(d) Forfaiting increases trade opportunity - with forfaiting, the exporter is able to grant credit
to his buyer freely and thus, be more competitive in the market.
(e) Forfaiting also helps to realise price transfer - the exporter can also transfer the
corresponding financing cost into the sale price.
Q. Every person/firm or company must have __________ code, issued by DGFT, to engage in
exportimport trade.
Ans: IEC
Q. SOFTEX form is used for export of __________.
Ans: Software
Q. The exporter is required to submit the export documents, along with the copy of
EDF/SOFTEX form within __________ days from the date of shipment to an authorized dealer.
Ans: 21 days
Q. Export proceeds from any of the ACU countries should be settled in US dollar terms through
a separate __________ account maintained by the AD for this purpose.
Ans: ACU dollar
Q. The exporter is required to apply in form __________ for permission for extension of time limit
for realization of export proceeds.
Ans: ETX
Q. An export unit in EPZ, can retain __________ per cent of the export proceeds in his __________
account with the AD.
Ans: 100, EEFC
Q. The effective date of realization of a foreign currency bill will be the __________ date of
credit to the __________account.
Ans: Value, NOSTRO
Q. A sight bill drawn in USD, submitted to the bank
on 1.7.2021, the NTP allowed will be 25 days, and
the Notional due date (NDD) of the bill will be
25.7.2021. The advance will be allowed at
concessional interest rate for 25 days, after which
the bill/advance will be treated as overdue.
In case of a 90 days DA (Usance) bill in GBP,
tendered to the bank on 1.7.2021, the NTP will be
25 days and NDD will be 25+90 days, i.e. 23.10.2021,
considering that no grace period is allowed
(ignoring holidays).
 A textile exporter, with estimated export sales On 31.8.2021, the exporter submits export documents for
of Rs. 300 lakhs during the last year and USD 48,000, against the order for USD 50,000. The
projected sales of Rs. 500 lakhs for the current documents are drawn on 30 days usance (D/A) as per
year, approaches the bank for granting credit terms of the order. The bank discounts the documents at
facilities. The bank sanctions following the days applicable rate, adjusts the PCL outstanding and
facilities in the account: credits the balance to the exporter’s account, after
recovering interest up to notional due date. Interest on
PCL/FBP/FUBD/FBN Rs. 100.00 lakhs PCL recovered separately.

Sub limits: The documents are realized on 29.10.2021, value date

27.10.2021, after deduction of foreign bank charges of
PCL (25% margin on fob value) Rs. 50.00 lakhs USD 250. The bank adjusts the outstanding post shipment
advance allowed against the bill on 31.8.2021.
FBP (10% margin on bill amount) Rs. 50.00 lakhs
Bank charges interest at – PCL-8.50% up to 180 days, and
FBD (15% margin on bill amount) Rs. 50.00 lakhs post shipment at 8.50% up to 90 days and 10.50%
thereafter. Overdue interest is charged at 12.50%. The
USD/INR rates were as under:
FBN (nil margin) Rs. 100.00 lakhs
— 2.6.2021: Bill Buying 75.20, Bill Selling 75.40.
He gets an order for USD 50,000 CFR, for exports
of textiles- dyed/hand printed, to UK, with
shipment to be made by 15.9.2016. — 31.08.2021: TT buying 74.92, Bill buying 74.85, TT
selling 75.08, Bill selling 75.15., premium for 30 days was
quoted as 04/06 paise.
On 2.6.2021 he approaches the bank for
releasing PCL against this order of USD 50,000. USD 50,000.00 @ 75.20 = Rs. 37,60,000 – less 12%
The bank releases the PCL as per terms of for insurance and freight cost ie., Rs 4,51,200
sanction.
= Rs.33,08,800 (FOB value of the order).
Q. What is the amount that the bank allows as PCL
to the exporter against the given export order, Less margin 25% i.e. Rs. 8,27,200 balance Rs.
considering insurance and freight costs of 12%. 24,81,600.
 A textile exporter, with estimated export sales On 31.8.2021, the exporter submits export documents for
of Rs. 300 lakhs during the last year and USD 48,000, against the order for USD 50,000. The
projected sales of Rs. 500 lakhs for the current documents are drawn on 30 days usance (D/A) as per
year, approaches the bank for granting credit terms of the order. The bank discounts the documents at
facilities. The bank sanctions following the days applicable rate, adjusts the PCL outstanding and
facilities in the account: credits the balance to the exporter’s account, after
recovering interest up to notional due date. Interest on
PCL/FBP/FUBD/FBN Rs. 100.00 lakhs PCL recovered separately.

Sub limits: The documents are realized on 29.10.2021, value date

27.10.2021, after deduction of foreign bank charges of
PCL (25% margin on fob value) Rs. 50.00 lakhs USD 250. The bank adjusts the outstanding post shipment
advance allowed against the bill on 31.8.2021.
FBP (10% margin on bill amount) Rs. 50.00 lakhs
Bank charges interest at – PCL-8.50% up to 180 days, and
FBD (15% margin on bill amount) Rs. 50.00 lakhs post shipment at 8.50% up to 90 days and 10.50%
thereafter. Overdue interest is charged at 12.50%. The
USD/INR rates were as under:
FBN (nil margin) Rs. 100.00 lakhs
— 2.6.2021: Bill Buying 75.20, Bill Selling 75.40.
He gets an order for USD 50,000 CFR, for exports
of textiles- dyed/hand printed, to UK, with
shipment to be made by 15.9.2016. — 31.08.2021: TT buying 74.92, Bill buying 74.85, TT
selling 75.08, Bill selling 75.15., premium for 30 days was
quoted as 04/06 paise.
On 2.6.2021 he approaches the bank for
releasing PCL against this order of USD 50,000.
The bank releases the PCL as per terms of 74.89 – Bill buying rate on
sanction. 31.8.2021 – 74.85 plus 4
Q. What exchange rate will the bank apply for paise premium for 30 days,
purchase of the export bill for USD 48,000
tendered by the exporter:
this being a DA bill.
 A textile exporter, with estimated export sales On 31.8.2021, the exporter submits export documents for
of Rs. 300 lakhs during the last year and USD 48,000, against the order for USD 50,000. The
projected sales of Rs. 500 lakhs for the current documents are drawn on 30 days usance (D/A) as per
year, approaches the bank for granting credit terms of the order. The bank discounts the documents at
facilities. The bank sanctions following the days applicable rate, adjusts the PCL outstanding and
facilities in the account: credits the balance to the exporter’s account, after
recovering interest up to notional due date. Interest on
PCL/FBP/FUBD/FBN Rs. 100.00 lakhs PCL recovered separately.

Sub limits: The documents are realized on 29.10.2021, value date

27.10.2021, after deduction of foreign bank charges of
PCL (25% margin on fob value) Rs. 50.00 lakhs USD 250. The bank adjusts the outstanding post shipment
advance allowed against the bill on 31.8.2021.
FBP (Foreign Bill Purchase) (10% margin on bill
amount) Rs. 50.00 lakhs Bank charges interest at – PCL-8.50% up to 180 days, and
post shipment at 8.50% up to 90 days and 10.50%
FBD (15% margin on bill amount) Rs. 50.00 lakhs thereafter. Overdue interest is charged at 12.50%. The
USD/INR rates were as under:
FBN (nil margin) Rs. 100.00 lakhs
— 2.6.2021: Bill Buying 75.20, Bill Selling 75.40.
He gets an order for USD 50,000 CFR, for exports
of textiles- dyed/hand printed, to UK, with — 31.08.2021: TT buying 74.92, Bill buying 74.85, TT
shipment to be made by 15.9.2016. selling 75.08, Bill selling 75.15., premium for 30 days was
quoted as 04/06 paise.
On 2.6.2021 he approaches the bank for
releasing PCL against this order of USD 50,000. USD 48,000.00 @ 74.89 = Rs.
The bank releases the PCL as per terms of
sanction.
35,94,720 less 15% margin
Q. What is the amount of post shipment advance on DA bill, i.e. Rs. 5,39,208 =
allowed by the bank under FBD, for the bill
submitted by the exporter:
Rs 30,55,512.
▪ PC- Packing Credit,
▪ PCFC- Packing Credit in Foreign Currency,
▪ EPC- Export Packing Credit, FBP - Foreign Bills Purchased,
▪ FDBP- Foreign Discounting Bills Purchased,
▪ FBE- Foreign Bills Export,
▪ PCL - Packing Credit Loan,
▪ FBN- Foreign Bills Negotiated,
▪ FBD- Foreign Bills Discounted,
▪ FDBD- Foreign Documentary Bill Discounted,
▪ FUBP- Foreign Usance Bill Discounted,
▪ FDB- Foreign Discounting Bills,
▪ FDDBP- Foreign Documentary Demand Bill Purchased,
▪ FDUBD- Foreign Documentary Usance Bill Discounted,
▪ RDBF- Re-discounted Demand Bill Foreign,
▪ RUBF- Re-discounted Usance Bill Foreign,
▪ AACB- Advance Against Collection Bills
 A textile exporter, with estimated export sales On 31.8.2021, the exporter submits export documents for
of Rs. 300 lakhs during the last year and USD 48,000, against the order for USD 50,000. The
projected sales of Rs. 500 lakhs for the current documents are drawn on 30 days usance (D/A) as per
year, approaches the bank for granting credit terms of the order. The bank discounts the documents at
facilities. The bank sanctions following the days applicable rate, adjusts the PCL outstanding and
facilities in the account: credits the balance to the exporter’s account, after
recovering interest up to notional due date. Interest on
PCL/FBP/FUBD/FBN Rs. 100.00 lakhs PCL recovered separately.

Sub limits: The documents are realized on 29.10.2021, value date

27.10.2021, after deduction of foreign bank charges of
PCL (25% margin on fob value) Rs. 50.00 lakhs USD 250. The bank adjusts the outstanding post shipment
advance allowed against the bill on 31.8.2021.
FBP (10% margin on bill amount) Rs. 50.00 lakhs
Bank charges interest at – PCL-8.50% up to 180 days, and
FBD (15% margin on bill amount) Rs. 50.00 lakhs post shipment at 8.50% up to 90 days and 10.50%
thereafter. Overdue interest is charged at 12.50%. The
USD/INR rates were as under:
FBN (nil margin) Rs. 100.00 lakhs
— 2.6.2021: Bill Buying 75.20, Bill Selling 75.40.
He gets an order for USD 50,000 CFR, for exports
of textiles- dyed/hand printed, to UK, with
shipment to be made by 15.9.2016. — 31.08.2021: TT buying 74.92, Bill buying 74.85, TT
selling 75.08, Bill selling 75.15., premium for 30 days was
quoted as 04/06 paise.
On 2.6.2021 he approaches the bank for
releasing PCL against this order of USD 50,000.
The bank releases the PCL as per terms of Bill submitted on 31.8.2021, drawn
sanction. on 30 days DA plus normal transit
Q. What will be the notional due date of the bill period of 25 days – 31.8.2021 plus
submitted by the exporter: (i) 30.10.2021 (ii) 30 days plus 25 days, 25.10.2021.
30.9.2021 (iii) 25.10.2021 (iv) 27.10.2021
 A textile exporter, with estimated export sales of On 31.8.2021, the exporter submits export documents for
Rs. 300 lakhs during the last year and projected USD 48,000, against the order for USD 50,000. The
sales of Rs. 500 lakhs for the current year, documents are drawn on 30 days usance (D/A) as per
approaches the bank for granting credit facilities. terms of the order. The bank discounts the documents at
The bank sanctions following facilities in the the days applicable rate, adjusts the PCL outstanding and
account: credits the balance to the exporter’s account, after
recovering interest up to notional due date. Interest on
PCL/FBP/FUBD/FBN Rs. 100.00 lakhs PCL recovered separately.

Sub limits: The documents are realized on 29.10.2021, value date

27.10.2021, after deduction of foreign bank charges of
PCL (25% margin on fob value) Rs. 50.00 lakhs USD 250. The bank adjusts the outstanding post shipment
advance allowed against the bill on 31.8.2021.
FBP (10% margin on bill amount) Rs. 50.00 lakhs
Bank charges interest at – PCL-8.50% up to 180 days, and
FBD (15% margin on bill amount) Rs. 50.00 lakhs post shipment at 8.50% up to 90 days and 10.50%
thereafter. Overdue interest is charged at 12.50%. The
USD/INR rates were as under:
FBN (nil margin) Rs. 100.00 lakhs
— 2.6.2021: Bill Buying 75.20, Bill Selling 75.40.
He gets an order for USD 50,000 CFR, for exports
of textiles- dyed/hand printed, to UK, with
shipment to be made by 15.9.2016. — 31.08.2021: TT buying 74.92, Bill buying 74.85, TT
selling 75.08, Bill selling 75.15., premium for 30 days was
quoted as 04/06 paise.
On 2.6.2021 he approaches the bank for releasing
PCL against this order of USD 50,000. The bank Interest is charged up to the date the
releases the PCL as per terms of sanction.
funds have been credited to the banks
Q. Total interest on the export bill discounted, will
NOSTRO account, the effective date of
be charged up to: (i) notional due date 25.10.2021
credit is the value date of credit, i.e.
(ii) value date of credit 27.10.2021 (iii) date of
realisation 30.10.2021 (iv) date of credit to nostro
27.10.2021.
account 29.10.2021
Q. (a) Finance allowed to an exporter, to fund the needs procurement of
raw material, manufacturing and up to the stage of packing and
shipment, is called __________ finance.
Ans: pre-shipment
(b) While considering export credit, it must be ensured that the
exporter’s name does not appear under the exporter’s __________ of RBI,
and __________ list of ECGC.
Ans: caution list, specific approval
(c) Normally the total period allowed for PCL should not exceed __________
days.
Ans: 180
(d) PCL advance should be liquidated on submission of relative export
bills, by way of allowing __________ finance against those bills.
Ans: post shipment;
(e) PCL allowed without prior lodgement of order or LC is called __________
account facility.
Ans: Running
(f) Post-shipment finance is essentially an advance against __________.

Ans: receivables

(g) In case of rupee finance, the bills is to be purchased/discounted/negotiated at appropriate __________ rate.

Ans: bill buying

(h) __________ of documents takes place, when export documents, are drawn under Letter of Credit.

Ans: negotiation

(i) The NTP allowed at present is generally __________ days for all foreign currency export bills.

Ans: 25 days

(j) The present interest cap for PCFC/EBR for 180 days is LIBOR plus __________%.

3.5%

(k) __________ and __________ are the two other methods of financing exports.

Factoring, forfaiting

(l) Guaranteeing payment of a bill of exchange, is called __________.

avalling

(m) A factor would finance generally __________% of the invoice value, while forfaiting could be done for value of
invoice.

75-80%, full.
(a) Every Importer must have an __________ code issued by DGFT.
Ans: IEC
(b) The remittance against imports should be completed not later
than __________ months from the date of shipment.
Ans: six
(c) Advance remittance for imports can be allowed up to USD
__________, without insisting on guarantee of an International Bank.
Ans: 200,000
(d) In case of advance remittances for commodities, physical
imports should be made within __________ months.
Ans: six
(e) As an evidence of having made the imports, the importer has to
submit __________, duly approved by customs, to the AD.
Ans: bill of entry
Q. Which of the following statement is are correct?
1. The Reserve Bank of India, with powers under Foreign Trade policy,
regulates the Exchange Control and receipts/payments of foreign
exchange.
2. Every person/firm/company engaged in Export Import trade has to
apply for and obtain an Importer Exporter Code Number (IEC Number)
from the Director General of Foreign Trade.
3. SOFTEX form is used for declaration of Export of software.
4. Trade samples of goods and publicity material supplied free of
payment must be declared on the statutory declaration form.
5. Payment of export bills can be received by debit to FCNR, NRE
account of the buyer.
a) Only 1, 2, 3 and 4
b) Only 2, 3, 4 and 5
c) Only 2, 3 and 5
d) Al 1 to 5
(f) __________ credit is credit directly extended by the
overseas supplier of goods to the importer.
Ans: suppliers
(g) As per RBI guidelines, any credit up to a period of
less than three years is called __________ credit, while
credits for three years and more are called ECB.
Ans: Trade
(h) Banks can approve, proposals for availing buyer’s
credit for a period with maturity up to __________, for
import of all items permissible under the Foreign Trade
Policy, up to USD __________ million per import
transaction.
Ans: One year, 20
Q. Which of the following statement is are correct?
1. Exports to Nepal are to be paid through ACU mechanism.
2. Status account holders are allowed to retain 100% of the
eligible credits received in EEFC account.
3. Export bill financing is known as PCL.
4. In case after allowing PCL, exports do not take place, the
advance is still treated as export credit.
5. At present banks are allowed to charge interest on PCFC,
for 180 days at a maximum of LIBOR plus 1.00%.
a) Only 2
b) Only 1
c) Only 5
d) Only 3 and 4
Q. IEC number is required for:
(a) Import of capital goods.
(b) Filing of bill of entry with customs.
(c) Undertaking any export or import transaction.
(d) Receiving gift from relatives abroad.
Q. Banks cannot allow export credit for:
(a) Supplies to special economic zones established
within the country.
(b) Supplies to merchant exporters, where the
payment is received in rupees from the bankers of
the exporters.
(c) Supplies to oil mills for export of oil cake, where
a large part of packing credit is adjusted by sale of
oil in the local markets.
(d) Supplies to a manufacturer in India, who makes
import substitute spare for machineries.
Q. An export to a State Electricity Board, covering
supply of Transmission towers, under a World Bank
financed Project, will be called __________ exports.
(a) Global
(b) Merchant
(c) Deemed
(d) Sub-supplier
Q. Export credit in foreign currency can be presently
allowed to exporters in India at a maximum interest
rate of __________.
(a) Libor plus 250 bps.
(b) BPLR – 250 bps.
(c) Libor plus 350 bps.
(d) BPLR plus 100 bps.
Q. Packing Credit Loan (PCL):
(a) Is allowed against export bills on consignment
basis.
(b) Can be allowed to local manufacturer for supply
of goods for exports.
(c) Is another mode of financing imports.
(d) Can be allowed in local currency only.
Q. An Authorised dealer bank/branch, needs to
submit to Reserve Bank of India, statement on half
yearly basis, showing details of import bills, where
evidence of imports has not been submitted within
the stipulated time.
(a) XOS
(b) BEF
(c) ETX
(d) STAT 8
Q. EEFC accounts can be maintained:
(a) By individuals receiving grants in Rupees from
abroad, under FCRA.
(b) By companies going in for External Commercial
Borrowings.
(c) By companies having imports of goods for
domestic consumption.
(d) By receivers of inward remittance by way of
export proceeds.
Q. A financing arrangement, where the transaction
is financed by a financial institution in the
exporter’s country or any third country, based on
the arrangements made by the importer or his bank,
is called:
(a) A transaction under Documentary Credit
(b) A transaction of Supplier’s Credit
(c) A transaction of Buyer’s Credit
(d) A transaction finance through Factoring
Q. As per extant FEDAI guidelines, crystallization of
export bills purchased/discounted, is to be done as
under:
(a) On the 10th day after due date of the bill.
(b) On the 20th day from the date of handling of the
bill.
(c) On the 45th day from the due date.
(d) As prescribed by each bank or as per the
arrangement between the bank and the customers.
Q. Factoring is defined as:
(a) Agreement between the exporter and importer to
factor the price of shipping goods into the export
invoice.
(b) Agreement between the financial institution and
the importer to manage the Credit portfolio of the
exporter.
(c) Agreement between the financial institution and
the exporter for purchase of the latter’s book debts
and control the credit extended to the importers.
(d) Agreement between the exporter’s Bank and the
importer’s bank for discounting of export
receivables without recourse.
Q. What does the Foreign Exchange Rate Portal allow
corporates to do in real-time?
A) To access the dealing room for booking their
foreign exchange requirements
B) To alter the foreign exchange rates offered by the
bank
C) To change the terms of their contracts with the
bank
D) To withdraw cash from their accounts
Answer: A) To access the dealing room for booking
their foreign exchange requirements
Q. What are the corporates under obligation to
comply with when confirming deals through the
portal?
A) Submitting underlying documents as per
regulatory guidelines
B) Paying extra fees for the service
C) Giving a portion of their profits to the bank
D) Notifying the bank about their foreign exchange
requirements in advance
Answer: A) Submitting underlying documents as per
regulatory guidelines
Q. Which of the following is a benefit of using the Foreign
Exchange Rate Portal?

A) Limited interaction with the Bank's dealing room

B) Advisories from the Bank's dealers on the Inter-Bank

markets and the latest developments on the exchange
front

C) Rates are provided on a weekly basis

D) There is no audit trail and no MIS on confirmations

received from the Bank

Answer: B) Advisories from the Bank's dealers on the

Inter-Bank markets and the latest developments on the
exchange front
Q. What is the key functionality of the Export Data
Processing and Monitoring System (EDPMS)?

A) Facilitating retail banking transactions

B) Monitoring and reporting data related to Export

Declaration Forms (EDF)/ Shipping Bills (SB)/ SOFTEX

C) Conducting audits of banking institutions

D) Managing employee data of banking institutions

Answer: B) Monitoring and reporting data related to

Export Declaration Forms (EDF)/ Shipping Bills (SB)/
SOFTEX
Q. What is the primary purpose of the Import Data
Processing and Monitoring System (IDPMS)?
A) To facilitate efficient data processing for payment of
import transactions and effective monitoring thereof.
B) To monitor and regulate the export transactions in
India.
C) To facilitate the processing of domestic transactions
within the country.
D) To monitor the foreign exchange rates in the global
market.
Answer: A) To facilitate efficient data processing for
payment of import transactions and effective monitoring
thereof.
Q. How do the Banks receive the Bill of Entry (BoE)
from the EDI Ports?

A) The importer sends the BoE to the Banks.

B) Banks download the BoE from the BoE Master in

the IDPMS.

C) Customs authorities send the BoE directly to the

Banks.

D) BoE is not required in the process.

Answer: B) Banks download the BoE from the BoE

Master in the IDPMS.
Q. For non-EDI ports, how is the Bill of Entry (BoE) data
uploaded in the IDPMS?

A) The importer uploads the BoE data directly to the

IDPMS.

B) The AD Bank of the importer uploads the BoE data as

per the “Manual BoE reporting” format.

C) The customs authorities upload the BoE data directly

to the IDPMS.

D) The BoE data is not uploaded to the IDPMS for non-EDI

ports.

Answer: B) The AD Bank of the importer uploads the BoE

data as per the “Manual BoE reporting” format.
Thank You