Are Construction contractors eligible for Packing credit?

Pre shipment credit  to Construction Contractors

 Are Construction contractors eligible for Packing credit?

Yes, construction contractors are eligible for pre shipment finance from bank subjected  to terms and conditions.

In this article the details of packing credit to construction contractors are described. 

Please read below the extract of circular issued by reserve bank about the packing credit loan to construction contractors:
The packing credit advances to the construction contractors to meet their initial working capital requirements for execution of contracts abroad may be made on the basis of a firm contract secured from abroad, in a separate account, on an undertaking obtained from them that the finance is required by them for incurring preliminary expenses in connection with the execution of the contract e.g., for transporting the necessary technical staff and purchase of consumable articles for the purpose of executing the contract abroad, etc.

The advances should be adjusted within 365 days of the date of advance by negotiation of bills relating to the contract or by remittances received from abroad in respect of the contract executed abroad. To the extent the outstanding  in the account are not adjusted in the stipulated manner, banks may charge normal rate of interest on such advance.
The exporters undertaking project export contracts including export of services may comply with the guidelines/instructions issued by Reserve Bank time to time.
I hope, the above information from  helps construction contractors to avail pre shipment loan from bank. 

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The above information is a part of Export import business Course online

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