Pre-Shipment Export Credit Facility is a loan extended for purchase of raw materials, processing and converting them into finished goods, warehousing, packing and transporting the goods until the time of shipment.

The Bank may avail the facility against with or with out NBE guarantee.

Eligibility

1. Pre-Shipment Export Credit Facility against NBE Guarantee If the facility is availed against the NBE guarantee, the eligibility, amount, tenure and other criteria of the pre-shipment export loan shall be set per the NBE directive.


2. Pre-Shipment Export Credit Facility without NBE Guarantee


• If the facility is availed without NBE Guarantee:


• The applicant shall be Business or Corporate Class customers that are engaged in any export business rated as Grade 1 or 2.


• The applicant shall present valid sales contract/a bona-fide order from a foreign buyer.


• The selling price of the exportable item shall be with in acceptable range and this shall be confirmed by the Trade Service process team.


• Each advance shall not exceed 70% of the sales contract.


• The facility shall require opening of irrevocable Letter of Credit for each advance made by the Bank.


• To help in credit analysis of such requests, the applicant shall provide receipt of export proceeds in the 12 months preceding the date of application from local banks for Pre-Shipment Export Credit Facility.


3. The Pre-Shipment Export Credit Facility availed by the Bank without NBE Guarantee shall be reviewed every year unless the Bank demands it to be reviewed by the credit approving team for any remedial action when the performance of the account is deteriorating.


4. The advance shall be settled from the proceeds of the respective irrevocable Letter of Credit. This is attentively followed up by Customer Relationship Manager/Customer Relationship Officer/Branch Manager to avoid diversion of fund and timely settlement of the advance.