Packaging credit is nothing but a pre-shipment loan given to exporters at a low interest rate in order to boost exports. It is one of the most commonly used trade finance tools by international exporters. Import-export training classes will help you better understanding international business and its different terms. Obtaining packing credit is a government policy to encourage exporters to earn foreign currency, which strengthens the financial status of a country. It is given by authorized banks by the Reserve Bank of India. Packaging credit is pre-shipment financing offered by banks for acquiring raw materials and arranging goods ready for shipment. Banks provide packing credits along with raw materials or finished goods in some cases. It is a separate form of credit given to exporters unrelated to any other loan granted by the bank. When the overseas buyer sends the shipment amount, the packing credit amount will be adjusted by the bank to close the loan for the export order. Exporters have to approach their bank with their export order to obtain packing credit. Bank officials visit the exporter’s factory and assess the value of the goods with the export order. What are your thoughts about this article about packing credit to exporters? This information is a part of our export-import online classes.
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