Thursday, March 15, 2007


Pre - Shipment Export Credit in Foreign Currency Guidelines : 

  • Authorised dealers permitted to extend Preshipment Credit in Foreign Currency (PCFC) to exporters for domestic and imported inputs of exported goods at internationally competitive rates of interest. 
  • Exporters can avail various options for credit.
  • To enable operational flexibility, banks can extend PCFC in one convertible currency in respect of an export order invoiced in another convertible currency. 
  • The foreign currency balances available with the bank in EEFC Accounts, RFC Accounts and FCNR Accounts could be utilised for financing the pre-shipment credit in foreign currency. Further the foreign currency balances available under Escrow Accounts and Exporters Foreign Currency Accounts can be utilized for the purpose, provided other requirements are complied with. 
  • The PCFC will be available initially for a maximum period of 180 days; any extension of the credit will be subject to the same terms and conditions as applicable for extension of rupee packing credit and additional interest cost of 2 percent above the rate for the initial period of 180 days prevailing at the time of extension.
  • PCFC can be liquidated out of proceeds of export documents or by grant of foreign currency loans (DP Bills), repaid /prepaid out of balances in EEFC A/c as also from rupee resources of the exporter to the extent exports have actually taken place. 
  • Banks permitted to extend the ‘Running Account’ facility under the PCFC Scheme to exporters for all commodities, on the lines of the facility available under rupee credit, subject to prescribed conditions. 


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