IB0018 – Export-Import Finance
DRIVE-Spring 2015
PROGRAM-MBADS (SEM 4/SEM 6)MBAFLEX/ MBAN2 (SEM 4)PGDIB (SEM 2)
SUBJECT CODE & NAME IB0018 – Export-Import Finance
BK ID-B1910
CREDIT & MARKS-4 CREDITS, 60 MARKS
Q1. Discuss any 5 trade financing schemes by EXIM bank in brief. (5 Trade financing schemes) 10
Answer: EXIM Bank of India: Export-Import Bank of India (EXIM Bank) was set up in March 1981 under the Export-Import Bank of India Act, 1981 for the following purposes:
- For providing financial assistance to exporters
- For providing financial assistance to importers
iii. For functioning as the financial institution for co-ordinating the working of institutions engaged in financing
Q2. What is the need for export finance in India? Write a short note on export financing facilities in India.
(Need for export finance, Financing facilities) 5, 5
Answer.
Need for export finance
Export finance refers to financial assistance extended by banks and other financial institutions to businesses for the shipping of products outside a country or region. Export financing enables MSMEs to expand its reach to a global audience. Export financing is a major component of successful export transactions. Exporters need finance for
Q3. As an exporter, what benefits you can get from Post shipment finance scheme? Discuss the types of post shipment credits.
(Post shipment finance, types) 7, 3
Answer.
Post shipment finance scheme
Post shipment finance may be defined as a loan or advance granted bybanks to their exporter clients after the shipment of goods till the date ofreceipt of payment from overseas buyer or credit opening bank. It is a shortterm credit provided by banks to exporters to meet their working capitalrequirements after the shipment of goods.When
Q4. Write short notes on:
- a) Export credit Guarantee Corporation
- b) Foreign exchange risk
(Meaning and role of ECGC, Meaning of foreign exchange risk) 5, 5
Answer.
- a) Export credit Guarantee Corporation
Almost all countries of the world have set up organizations in their countriesto provide credit risk insurance facilities to their exporters. In India,Government of India has set up ECGC to cover export credit risk.In 1957, Government of India set up the Export Risk Insurance Corporationof India. In 1964, the name was changed to
Q5. There are several factors that affect the exchange rate of a country. Explain any 5 determinants of exchange rate. (5 Determinants of exchange rate) 10
Answer: Exchange rate : is one of the most important determinants of a country’s relative level of economic health. Exchange rates play a vital role in a country’s level of trade, which is critical to most every free market economy in the world. For this reason, exchange rates are among the most watched, analyzed and governmentally manipulated economic measures. But exchange rates matter on a smaller scale as well: they impact the real return
Q6. What is custom duty? Discuss its types.
(Meaning, types) 4, 6
Answer.
Custom duty
A tax levied on imports (and, sometimes, on exports) by the customs authorities of a country to raise state revenue, and/or to protect domestic industries from more efficient or predatory competitors from abroad.
Customs duty is
