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ECGC ECGC was established in 1964. Export Credit and Guarantee Corporation provides guarantee cover for risks which can be availed by the banks after making payment of Premium.
Small Exporters’ policy
A small exporter is defined whose anticipated total export turnover for the period of 12 M is not more than 50 lac. The policy is issued to cover shipments 24 M ahead.
Specific Shipment Policy
Commercial risks – Failure to pay within 4M. It covers short term credit not exceeding 180 days Exports Specific Buyer Policy
ECIB (WT-PC) – Exporters Credit Insurance for Banks (whole Turnover Packing Credit)
ECIB – PC – for individual exporters
ECIB –(WT- PS) – Whole Turnover Post Shipment Credit Policy
Export Finance Guarantee
When banks make advance to exporters against export incentives receivables like Duty Drawback etc. The cover available is 75% and the premium ranges from 7 paisa onwards.
Lodging of Claim
The claim should be filed with ECGC within maximum period of 6 months date of lodging of Default Notice.
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Exim Bank (Export/Import Bank) was established in 1981 with the objective of financing Import Export Trade specially on Long term basis
DPG (Deferred Payment Guarantees)
It is normally beyond 6M and meant for SHE (Status Holder Exporters) only.
Banks can approve proposals up to 25 crore.
Above 25 crore up to 100 crore are referred to EXIM bank.
Above 100 crore proposals will be considered by Inter institutional Working Group consisting of members from RBI, FEDAI, ECGC and EXIM.
FEMA provisions The important FEMA guidelines with regard to Foreign exchange are as under:
No drawl of exchange for Nepal and Bhutan
If Rupee equivalent exceeds Rs. 50000/-, payment by way of crossed cheque.
Indian citizens can retain and possess Foreign currency up to USD 2000 or its equivalent.
Unspent currency must be surrendered within a period of 180 days after arrival in India.
RFC accounts Resident Foreign Currency account is opened by Indian residents who were earlier NRIs and forex is received by them from their overseas dues:
The accounts can be opened as SB/CA/FD type.
Proceeds are received from overseas.
Out of Monetary benefits accruing abroad
The funds are freely repatriable.
Minimum amount is USD 5000.
RFC- D accounts Resident Foreign Currency (Domestic) accounts are opened:
By Indian residents who visit abroad: and
Bring with them Foreign Exchange;
As honorarium, gift etc.
Unspent money can also be deposited.
These are CA nature accounts and no interest is paid.
FEDAI Foreign Exchange association of India is a non-profit body established in 1958 by RBI. All public sector banks, Private Banks, Foreign Banks and Cooperative banks are its members
Export Transactions : Forex liability must be crystallized into Indian rupees on 30th day after expiry of NTP (Notional Transit Period) in case of Sight bills and on 30th day after notional due date in case of Usance bills.
DP Bills (sight) are retired after crystallization on 10th day after receipt.
DA Bills are retired (crystallized) on Due Date.
All Foreign Currency bills under LC, if not retired on receipt, shall be crystallized into Rupee liability on 10th day after date of receipt of documents at TT Selling Rate.
Normal Transit Period is:
- 25 days for export bills,
- 3 days for Rupee bills drawn under LC and payable locally
- 7 days for rupee bills drawn under LC and payable at other centers
- 20 days for Rupee bills not drawn under LC.
- For exports to Iraq, normal transit period is 60 days.
ADRs American Depository Receipts are Receipts or Certificates issued by US Bank representing specified number of shares of non-US Companies
GDRs Global Depository Receipt is a Dollar dominated instrument with following features:
Traded in Stock exchanges of Europe.
Represents shares of other countries.
GDRs do-not carry voting rights.
IDRs Indian Depository Receipts are traded in local exchanges and represent security of Overseas Companies.
CDF (Currency Declaration Form)
CDF is required to be submitted by the person on his arrival to India at the Airport to the custom Authorities in the following cases:
If aggregate of Foreign Exchange including Foreign currency/TCs exceeds USD 10000 or its equivalent.
If aggregate value of currency notes (cash portion) exceeds USD 5000 or its equivalent.
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