Exports

Different trade products offered for exporters are:

Bill Negotiation: Bill / document negotiation is for export letters of credit and / or firm contracts. Negotiation means to give value to the beneficiary for drafts (drawn at sight) and / or documents, as distinct from merely examining & forwarding them to the issuing bank.

A bank, which has not confirmed the credit, negotiates with recourse to the beneficiary in the event of non-acceptance / payment by the issuing bank, a confirming bank negotiates without such recourse.

Bill Discounting: Discounting is for usance bills called under LC's. It must contain a Bill of Exchange (Demand for payment, amount must be same as the commercial invoice amount) and the bill must be accepted by the drawee i.e. the issuing bank. The bill is normally re-discountable locally to a discount house or another bank.

Post Shipment Finance: Post shipment finance is a variation of a demand loan with a loan repayment linked to the maturity of the bills drawn against LC' or contract. Post shipment finance is offered against sight as well as usance bills.

Export Refinance: Export Refinance is a scheme under State Bank of Pakistan (SBP) to promote Pakistani Exports. Under this scheme, an exporter may avail finance from any scheduled bank at a concessional rate. Export Refinance is available to the exporter under two schemes Part I or Part II.

In Part I an exporter may avail finance against individual usance L/Cs or contracts after satisfying the terms and conditions of the scheme, this scheme is available either on a pre-shipment or post-shipment basis for the exporter. Under Part II an exporter can avail finance upto a percentage (determined by SBP) of exports performed in the previous financial year.