Supplier’s Credit For Deferred Payment Export:
- The Exim bank offers supplier’s credit both in INR and foreign currency at a post-shipment stage.
- Under this scheme, an exporter can extend finance up to 100% to the overseas supplier.
- Fixed rate of interest is charged, if funding is done in INR & Floating rate of interest at a margin over LIBOR is charged, if funding is done in foreign currency.
- The Exim bank does a contract with the Indian exporter as well as the Exporter’s bank.
How Supplier’s credit for deferred payment works?
- Before sending the goods, exporter demands the foreign buyer for the bank guarantee.
- The foreign buyer gets the bank guarantee in the form of AVIL Bill of Exchange & send it to the exporter’s bank or exporter.
- In turn the Exporter’s bank, after the permission of the exporter, submit it to the Exim bank.
- After the approval of the Exim bank, the exporter exports the goods.
- The exporter gets the payment from the Exim bank in advance. The Exim bank credit the amount in INR to the exporter’s bank account or to the NOSTRO a/c of the Indian bank, if the credit is taken in the foreign currency.
- Foreign buyers bank starts paying to Exim bank in every six months as an installment.