Export Packing Credit

Export Packing Credit

Export Packing Credit (EPC) is a type of pre-shipment finance provided to exporters to facilitate the process of packing and shipping goods. This financial assistance is offered by banks and financial institutions to help exporters meet their working capital requirements before the actual shipment of goods. Here are the key details about Export Packing Credit:


  • EPC is designed to assist exporters in covering the costs associated with the packing, processing, and manufacturing of goods before they are shipped.

Pre-shipment Finance:

  • It is a form of pre-shipment finance, meaning it is provided before the goods are shipped to the overseas buyer.

Working Capital Support:

  • EPC provides working capital support to exporters, ensuring they have the necessary funds to prepare and package the goods for export.


  • Exporters, including manufacturers, merchants, and trading firms, are generally eligible to apply for Export Packing Credit.


  • The credit may be secured by the goods themselves or other collateral, depending on the terms and conditions set by the lending institution.


  • Repayment is expected to be made from the proceeds of the export bill, usually within a specified period after the shipment of goods.

Interest Rates:

  • The interest rates for Export Packing Credit may vary and are influenced by factors such as the creditworthiness of the exporter and prevailing market conditions.

Types of Export Packing Credit:

  • There are two types of EPC:
  • Packing Credit in Rupees (PCR): Issued in the local currency.
  • Packing Credit in Foreign Currency (PCFC): Issued in a foreign currency to cover expenses incurred in that currency.


  • Exporters need to submit relevant documents, such as the export order, letter of credit, and other trade-related documents, to avail of Export Packing Credit.

Regulations and Compliance:

  • The terms and conditions for Export Packing Credit are often subject to regulations and guidelines set by the central bank or financial regulatory authority of the country.


  • Exporters may be required to insure the goods against various risks during the transit period.

It's essential for exporters to work closely with their financial institutions to understand the specific terms and conditions associated with Export Packing Credit, as these may vary between different banks and regions. Additionally, compliance with international trade regulations and documentation requirements is crucial for a smooth and successful export transaction.

How is export packing credit limit calculated?

  • Export Packing Credit limits are determined based on factors like the value of the export order, production costs, and working capital needs. Banks assess the exporter's creditworthiness, the nature of the goods, and associated risks to set a suitable credit limit, ensuring financial support for the pre-shipment phase.
    Banks generally put a cap of 20 to 25% of the total annual sales of a company while providing packing credit loans.

Why is packing credit important to the exporter?

  • Packing credit is crucial for exporters as it provides pre-shipment financing, covering costs like manufacturing, processing, and packaging. This financial support ensures timely and smooth execution of export orders, enabling exporters to meet working capital needs and fulfill contractual obligations, fostering a competitive edge in international trade.

What is the maximum period of packing credit?

  • The maximum period of packing credit is determined by the export cycle and typically extends up to 180 days. This allows exporters sufficient time to prepare, pack, and ship the goods before the repayment is expected from the proceeds of the export bill.

What is PCFC limit?

  • PCFC limit is allowed for a maximum period of 180 days, and the branch monitors the end use of credit in case of Rupee credit

How is packing credit limit calculated?

  • Packing credit limit is generally calculated based on the value of the exporter's estimated export orders. It involves a maximum limit on the advance given by the bank to the exporter, which is usually between 20% to 25% of the estimated export bill. It is calculated after assessing the financial position of the exporter, value of export orders, and requirements of the pre-export period.

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