Packing Credit/Export Finance
Packing credit is a pre shipment finance given to exporters with a law interest rate to boost exports. Packing credit is given by authorized bank by the instruction of Reserve Bank as a government policy to promote exporters to earn foreign currency to strengthen financial status of a country.
As quoted by RBI about packing credit – “No Export Order should suffer for want of finance”. This says all about the purpose of Packing Credit finance to Exporters.
The basic purpose of Packing Credit Finance is to enable the exporter to procure process, manufacture or store the goods for export. Packing credit refers to the credit granted by bank to an exporter to enable him to pack the goods. This is short-term working capital advance.