DEFERRED CREDIT FACILITIES : Export of goods on deferred payment terms can be financed under suppliers credit or Buyer'$ credit. Let us first understand what they are.

Supplier's Credit: The exporter extends credit directly to the overseas buyer and seeks refinance from commercial banks EXIM bank.

Buyer's Credit: It is a loan extended by a financial institutions or a consortium of financial institutions to the overseas buyer for financing a particular contract. Let us discuss Buyer's Credit in detail.

Under this scheme, credit is granted by EXIM Bank jointly with an authorised dealer to foreign buyers m connection with export of capital goods and turnkey projects from India. The exporters are paid out of the buyer's credit on a non-recourse basis on their complying with the terms of the export contracts to be financed under the scheme. Before the exporter enters into any contract providing for credit terms to be financed under buyer's credit scheme, they should have detailed discussion with the bankers. While considering proposals under the scheme, the following factors are taken into account by EXIM Bank:

I) competence and capability of Indian exporters in complying with the proposed commercial terms of the contract;

ii) Justifiability of the contract on commercial considerations;

iii) economic viability of the overseas projects concerned of the importer and general economic conditions of his country;

iv) credit worthiness of foreign borrower.

Reserve Bank's permission is also required for the purpose of granting credit under the scheme since payment will have to be made to the exporter on behalf of non-resident buyer. Application to the Reserve Bank should be made by the authorised dealer in Form DPX 6 for the purpose.