Banking News

Eligibility norms for bank finance to exporters

Banks extend export credits to exporters of goods and services, where the loans are released for procuring, Packing processing (where necessary), manufacturing and finally for packing of goods. The credit facility is also available to service providers for the working capital requirement like the purchase of consumables, wages, and supplies etc. for the rendering of services to an overseas buyer.

The general requirements to become eligible for bank finance is that the exporter must hold confirmed export order/s in hand through the letter of credit/s. Bank may also consider granting finance on firm orders received by the exporter of good track record. In some special cases, lodgment of export orders or letter of credit may be waived by the banks depending upon nature of export, past experience, and creditworthiness of the exporters.

Besides the above conditions, the exporter needs to fulfill the following, to be eligible for export finance.

  1. He should be the customer of the bank where he wants to avail export credit facilities.
  2. He must hold Import Export Code No. (I.E. Code No.) Issued by Direct General of Foreign Trade (DGFT).
  3. He must hold registration cum membership certificate from Export Promotion Council as applicable to his unit (List of Export Promotion Councils (EPCs), Commodity Boards, and export development authorities is attached below).
  4. The exporter’s name should not be included in the caution list of RBI.
  5. He is not in the specific approval list of ECGC.
  6. Exports of services also qualify for working capital export finance.  The exporter shall register with the Electronic and software Export Promotion Council or Services Export Promotion Council or with Federation of Indian Export Organizations, as applicable to their unit

Banks have to notify ECGC, in a prescribed format within 30 days for the facilities granted. For new accounts and accounts taken over from other banks, prior approval of ECGC is necessary for releasing export credits.

List of Export Promotion councils (EPCs), Commodity boards, export development authorities

Apparel export promotion council, Cashew Export Promotion Council of India, CAPEXIL, Basic chemicals, Council for leather exports, Pharmaceuticals & cosmetics EPC (CHEMEXCIL), Engineering Export Promotion Council (EEPC), Council for leather exports, Electronics & Computer Software EPC, Export Promotion council for Handicrafts (Handicraft items), The cotton textile promotion council, Export promotion council for EOUs & SEZ units (100% Export oriented units & Special economic zone Units), Federation of Indian Export Organisations (FIEO),   Pharmaceuticals Export Promotion Council, The plastic Export Promotion Council, Export promotion council for EOUs & SEZ units (100% Export oriented units & Special economic zone Units), The Gem & Jewellery Export Promotion Council, Handloom Export Promotion council (All handloom products, including carpets and floor coverings),Indian oilseeds & produce Export Promotion Council, The Indian silk Export Promotion Council, Jute products development &Export Promotion Council, Pharmaceuticals Export Promotion Council, Project exports Export Promotion Council (civil constructions, turn-key including engineering procurement & construction), Power loom development & Export Promotion Council, Synthetic & Rayon textile Export Promotion Council, Telecom Equipment and services Export Promotion Council (TEPC) -Telecom equipment and services, The sports goods Export Promotion Council, Shellac & forest products Export Promotion Council (minor forest produce and their value added products in respect of multi-product exporters), Service export promotion council (Healthcare services, educational services, entertainment services, consultancy services etc.), Woolen & Woolens Export Promotion Council, Wool industry Export Promotion Council.

Commodity Boards and authorities

Coconut development board, Tobacco Board, Tea Board, Spices board, Coir board, Coffee board, the Rubber board, Marine Products export development authority, Agricultural and processed food products export development authority (APEDA)

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