Export Financing by Commercial Banks

Play an AI-generated podcast conversation about this lesson

What is the purpose of packing credit provided by banks to an exporter?

To finance buying, manufacturing, processing, packing, and shipping goods for export (correct)

To support research and development activities

To finance domestic sales of the exporter

To invest in real estate projects

When should an advance taken by an exporter as packing credit be liquidated?

There is no specific timeframe mentioned

Within 180 days from the date of commencement (correct)

Within 90 days from the date of commencement

Within 365 days from the date of commencement

What does post-shipment finance refer to in the context of export financing?

A loan provided for domestic projects

A loan provided before the goods are shipped

A long-term investment in a foreign market

A loan provided after the shipment of goods has already been made (correct)

Against what does post-shipment finance usually get provided?

Evidence of shipment of goods made to the importer or seller Signup and view all the answers

What is the typical duration for inter-corporate deposits?

6 months Signup and view all the answers

In what manner is a post-shipment finance different from a pre-shipment finance?

Post-shipment finance is provided after goods have been shipped, while pre-shipment finance is provided before shipment. Signup and view all the answers

What is the primary characteristic of venture capital financing?

Equity finance in new companies Signup and view all the answers

What is one advantage of debentures compared to equity or preferred investment?

Debentures require a lower return as they are considered safer investments. Signup and view all the answers

Why do venture capitalists provide support beyond just funds to entrepreneurs?

To enhance the growth and success of the entrepreneur Signup and view all the answers

How is venture capital financing different from traditional loans?

It includes long-term equity investment and support Signup and view all the answers

What is a key disadvantage of debentures?

Debenture repayment is an obligatory payment. Signup and view all the answers

What percentage of the total equity capital does a venture capital firm typically contribute?

49% Signup and view all the answers

How do debentures compare to preference or equity capital in terms of cost?

Debentures have lower costs as their interest is tax deductible. Signup and view all the answers

In which stage of a business does venture capital financing play a significant role?

Early-stage growth-oriented firms Signup and view all the answers

What is a characteristic of partly convertible debentures (PCD)?

PCDs allow conversion of only a portion into equity shares. Signup and view all the answers

What do bonds represent?

Loans made by investors to borrowers. Signup and view all the answers

What additional support do venture capitalists typically provide to entrepreneurs besides funding?

Sales strategy and management expertise Signup and view all the answers

Why do governments and corporations commonly use bonds?

To fund various projects such as infrastructure development. Signup and view all the answers

What does FII stand for?

Foreign Institutional Investor Signup and view all the answers

In which country is the term 'foreign institutional investor' commonly used?

India Signup and view all the answers

What is the main concept of crowdfunding?

Raising money from a group of people for a project Signup and view all the answers

What is Equity Funding in crowdfunding?

Investing money in an organization in return for securities Signup and view all the answers

How do Foreign Institutional Investors typically comply with investment regulations?

By registering with regulatory authorities and complying with relevant regulations Signup and view all the answers

What is the benefit of crowdfunding for startups according to the text?

It substantiates demand for their product before production Signup and view all the answers

What is the maximum amount of public deposits a company can accept as per Reserve Bank of India stipulations?

35% of its paid up capital and reserves Signup and view all the answers

What is the typical period for which public deposits can be accepted?

6 months to 3 years Signup and view all the answers

What are the securities that can be used for obtaining short-term loans?

Shares, government securities, life insurance policies, fixed deposit receipts Signup and view all the answers

In what way are overdraft facilities different from term loans?

Overdrafts allow customers to withdraw in excess of credit balance, while term loans disburse the entire amount at once. Signup and view all the answers

What is the main purpose of public deposits for companies?

To finance working capital requirements Signup and view all the answers

How are repayment terms different between loans and overdrafts?

Loans may have a schedule of repayments agreed upon, while overdrafts are repayable on demand. Signup and view all the answers