Packing Credit Limit (PCL) is for all cost prior to shipment of finished goods including packing, local transportation, labour charges etc.
The exporter or borrower must have an export order and should have an IEC Code.
His name should not in Caution List of RBI and not is under Specific Approval list of ECGC.
He is KYC complied with. Quantum of finance is on FOB value of contract.
Period of PCL should not exceed 180 days which can be extended to 360 days.
Rate of Intt is linked to BPLR (not exceeding BPLR minus 2.5% p.a.) & concessional Intt rate is given for first 180 days.
If pre-shipment advance is not adjusted by submission of export documents within 360 days from date of advance, the advances will cease to qualify for concessional rate of Interest.
RBI provides refinance only for 180 days.
PCL may be liquidated out of proceeds of bills drawn for the exported commodities on its purchase, discount or negotiated, thereby converting pre-shipment credit into post-shipment credit. It can also be repaid out of balance in EEFC a/c.