Page 271 - International Marketing

NPP

BRILLIANT'S Export Management 273

7. To pay marine freight and other shipping charges.
8. To pay for participation in international trade fairs and exhibitions.
9. To undertake market survey abroad and send trade delegations.
Methods or types of Post-shipment Finance
1. Export Bills negotiated under Letter of Credit: If the exporter
has obtained documentary letter of credit and has submitted the required
documents, as mentioned in the letter of credit, to the bank, the bank
negotiates them and sanctions the equivalent amount of post-shipment
finance to the exporter. The post-shipment finance is released after liqui-
dating the pre-shipment finance availed by the exporter.
2. Purchase/Discounting of Export Bills: If export bills are not
covered under letter of credit, the bank may extend post-shipment finance
by either purchasing or discounting the export bills. But before extending
such finance, the bank ensures that the exporter has complied with the
terms of the export. Such advances are generally insured by an appropri-
ate policy of ECGC.
3. Advance against Bills sent for collection: Post-shipment fi-
nance can also be granted:
 When the accommodation available Methods or types of
under the Foreign Bills purchased is Post-shipment Finance
exhausted; or 1. Export Bills negotiated
 When some export bills drawn under under Letter of Credit
letter of credit have discrepancies; 2. Purchase/Discounting
or of Export Bills
 When it is a customary practice in 3. Advance against Bills
the particular line of trade. sent for collection
4. Advance against Goods sent on 4. Advance against
Consignment Basis: When the goods are Goods sent on
exported on consignment basis, the payment Consignment Basis
is received after the sale of goods. In such 5. Advance against
Incentives
cases, the overseas branch of exporter’s
bank delivers the documents against Trust 6. Advance against
Receipt. The amount of post-shipment fi- Undrawn Balances
nance is adjusted against the export pro- 7. Advance against
ceeds realized later and the difference, if any, Retention Money
is credited or debited to the exporter’s ac- 8. Advance against
Deferred Payments
count.