packing credit under CGTMSE scheme

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siva (Querist)

03 December 2010 We have availed OD limit of Rs.25.00 Lakhs (Collateral Free) from Karnataka Bank Ltd., Tirupur and the same has been covered under CGTMSE scheme.

In addition to OD we need PACKING CREDIT AND FDBP Limit to execute Export orders. we have approached our bank, they told us that they will cover ECGC for Export credit facilities and they could not sanction Packing Credit & FDBP limit under CGTMSE scheme.

Is it mandatory for bank to cover ECGC for Packing credit. Any RBI Guidelines /circulars?

Pls clarify can we get loan under CGTMSE coverage for Export credit facilities

thanks & regards
V. Sivarajan

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

04 December 2010 Dear Siva,

I give below abstract of a RBI guidline from their circular on Rupee export credit.

RBI - DBOD No.DIR. (Exp).BC. 01 /04.02.02/2006-07 July 1, 2006

Circular on Rupee Export Credit

2.6 ECGC Whole Turnover Post-shipment Guarantee Scheme

2.6.1 The Whole Turnover Post-shipment Guarantee Scheme of the Export Credit Guarantee Corporation of India Ltd. (ECGC) provides protection to banks against non-payment of post-shipment credit by exporters. Banks may, in the interest of export promotion, consider opting for the Whole Turnover Post-shipment Policy. The salient features of the scheme may be obtained from ECGC.

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