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DRIVE-Fall
2014
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 the importance of exports for India. How do commercial banks assist in
exports?
(Importance
of exports, Assistance by commercial banks)5,5
Answer.
Importance of exports
Exports of a country play an important role in
the economy. A healthy balance, a sustainable development with trade and
foreign exchange reserves to maintain the country's export growth should be a
constant and high rate. Exports as a whole affect the industrial environment.
To compete internationally, the industry standard for quality products,
competitive price, good packaging, etc, which is important for overall
industry.
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 purchasing, processing, packaging and for their day to
activities. Banks in every country provide export finance facilities on liberal
terms. In India too, all the AD banks provide export finance to exporters under
the guidelines provided by RBI. An exporter needs finance at two stages, i.e.,
before shipment (pre-shipment) and after shipment (post shipment).
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 by banks to their exporter clients
after the shipment of goods till the date of receipt of payment from overseas
buyer or credit opening bank. It is a short term credit provided by banks to
exporters to meet their working capital requirements after the shipment of
goods. When an exporter has made the shipment and submits his documents to the bank,
the bank adjusts the packing credit granted earlier and extends the remaining
amount of export bill to exporter. The amount of packing credit given earlier
is also converted into post shipment finance.
Q4.
Write short notes on:
a)
Letter of credit
b
Types of foreign exchange risk exposure
Answer.
a)
Letter of credit
A letter
of credit is an obligation of the bank that opens the letter of credit (the
issuing bank) to pay the agreed amount to the seller on behalf of the buyer,
upon receipt of the documents specified in the letter of credit. A written
commitment to pay, by a buyer's or importer's bank (called the issuing bank) to
the seller's or exporter's bank (called the accepting bank, negotiating bank,
or paying bank).
Q5.
What is forex market? Explain the unique features of forex market.
(Meaning
features)
Answer.
The foreign exchange
market (forex, FX, or currency market) is a global decentralized market for the
trading of currencies. In terms of volume of trading, it is by far the largest
market in the world. The main participants in this market are the larger
international banks. Financial centres around the world function as anchors of
trading between a wide range of multiple types of buyers and sellers around the
clock, with the exception of weekends. The foreign exchange market determines
the relative values of different currencies.
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 based
generally on the value of goods or upon the weight, dimensions, or some other
criteria of the item (such as the size of the engine, in case of automobiles)
Get fully solved assignment, plz drop a mail with
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