EXIM

An importer wish to avail LC Limit for procurement of imported raw materials. While appraising the Limit , which of the following points should a Credit officer consider for processing Import LC Limit :

• The Limit should be adequate to facilitate procurement of adequate quantity of materials to support uninterrupted operation of the business.
• A proper analysis of cash Flow pattern of the customer should be made to ensure that sufficient funds are available to meet the liability when payment under the LC becomes due.
•   LC limits should be commensurate with borrower’s (applicant) turnover and working capital limits.
• All of the above

The usance period of LCs should be in line with the overall working capital cycle of the customer because

• This ensures that no devolvement takes place
• A longer usance period would mean additional credit period which implies availability of more funds than needed to run the working capital cycle. This could lead to diversion of funds
• LC is essentially a working capital facility
• A longer usance period would mean lesser credit period which implies availability of lesser funds than needed to run the working capital cycle. This would constrain the unit’s operations and lead to a shortfall in performance

Presently packing Credit in foreign Currency(PCFC) is not available in which of the following currencies

• US dollar
• Pound Sterling
• Japanese Yen
• Australian Dollar

A customer has received export orders worth 10 million US Dollar. It is authorized to get PCFC in which of the following Currency/Currencies

• US Dollar
• Pound Sterling
• Euro
• It is eligible to get PCFC in any of the above mentioned currencies

From risk prespective,which of the following type of post shipment finance is considered as more risk prone than others

• LC Bill Negotiation facility
• Advances against bills sent on collection basis.
• Advances against Duty Drawback entitlements
• Advances against exports on consignment basis.

If the proceeds of export bills are not realised within the normal transit period in the case of demand bills and within due date in the case of usance bills, interest chargeable for the overdue period will be

• Normal rate as applicable to post shipment finance
• Rate applicable on post shipment finance +2%
• Rate applicable as on Cash Credit Limit rate applicable for the unit
• None of the above

Packing credit is

• an advance made for packing goods for export.
• pre-shipment finance for export.
• a priority sector advance.
• advance for importer.

Which of the following person is not eligible for packing credit?

• merchant exporter.
• a person making deemed exports.
• sub-suppliers to manufacture exporter.
• supplier to sub-supplier to manufacture exporter

The running account facility for packing credit is available for

• status holders only.
• export for specified goods.
• exporters with good track record
• exporters with orders above Rs. 100 crores.

Normally the maximum period for which packing credit advances are made is

• 90 days.
• 135 days.
• 180 days.
• 360 days.