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?

  1. Before sending the goods, exporter demands the foreign buyer for the bank guarantee.
  2. The foreign buyer gets the bank guarantee in the form of AVIL Bill of Exchange & send it to the exporter’s bank or exporter.
  3. In turn the Exporter’s bank, after the permission of the exporter, submit it to the Exim bank.
  4. After the approval of the Exim bank, the exporter exports the goods.
  5. 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.
  6. Foreign buyers bank starts paying to Exim bank in every six months as an installment.