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Writer's pictureCA Sonith Shetty

Packing Credit Loan in Foreign Currency (PCFC)

PCFC is a form of pre shipment finance to exporters at internationally competitive rates. It’s the finance provided to the exporter for his working capital requirements based on the exports made by him.


Features:

  • Provided to an exporter as a form of pre shipment finance to exporters at internationally competitive rates.

  • Rate of interest is linked to LIBOR (Universally referred interest rate for ST loans)

  • The exporter will have a choice of currency i.e. USD, GBP, Euro etc.

  • Period is based on Export Cycle, up to 6 months (180 days). Maximum period of 360 days.


Eligibility:

  • Applicant shall be an Exporter

  • All Corporates having turnover of Rs.500 Crores and above.


Security:


Primary -

  • Hypothecation / extension of Hypothecation charge over the underlying current assets.

Collateral -

  • Extension of charge over Fixed Assets

  • Additional tangible security such as immovable properties / bank deposits etc.

Others -

  • Personal guarantee of proprietors / partners / promoters

  • Corporate guarantee


Things to keep in mind:

  • Exporter need to have satisfactory track record

  • Extended only on submission of proof of document of exported goods.


Documents required:


  • Request letter from the customer in Format of Annexure 5(1)

  • Proof of exports made.


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