Pre-Shipment Credit in Foreign Currency (PCFC) facility

The Pre-Shipment Credit in Foreign Currency facility is governed by the Reserve Bank of India under the Export Credit guidelines run by authorised banks in India. It allows exporters to obtain working-capital finance in a foreign currency before goods or services are shipped, in order to purchase/produce/export goods or provide services. The scheme’s purpose is to provide funds at internationally competitive rates to support export production and improve cash-flow for exporters. Your business, as an MSME exporter, can benefit if you need funds for raw-materials, processing, packing, manufacturing or other export-related pre-shipment expenses and wish to borrow in a foreign currency.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Foreign-currency advance for pre-shipment export activities: Under PCFC, the bank provides the loan/advance in foreign currency to finance the purchase of inputs, processing, manufacturing, packing or working-capital for export orders before shipment.
Convertible currency options : While you may invoice in one currency, the bank may allow borrowing in another convertible currency subject to availability and risk of cross-currency conversion.
Rate of interest linked to international benchmark plus spread: Because funds are in foreign currency, the interest rate is based on international reference rates such as LIBOR or EURIBOR, plus an admissible spread .
Maximum tenor up to 360 days : The standard pre-shipment credit period is up to 180 days, but branches may extend up to 270 or maximum 360 days in exceptional circumstances, if the export order/LC remains valid.
Eligibility based on export order/letter of credit and exporter track-record: To access PCFC, your business must hold a confirmed export order or letter of credit from an overseas buyer , and banks will assess your export track-record, realisation of past export bills, and financial/credit standing.

Financial Assistance

Component	Assistance Provided	Detailed Explanation
Pre-Shipment Foreign Currency Loan	Advance in foreign currency to finance pre-shipment export activities	Example: Your export business has a confirmed order from abroad. You secure USD 50,000 as PCFC in US Dollars to purchase raw materials and process the goods before shipment.
Flexible Currency Choice	Borrow in convertible currency even if export invoice is in another currency	Example: Your export order is invoiced in Euros but your bank allows borrowing in USD under PCFC. Your business bears any cross-currency cost or risk.
Working Capital for Export Processing	Finance raw-material purchase, labour, packing, storage, other pre-shipment costs	Example: You need funds for packing, storage and shipment preparation for your export consignment; you draw the advance under PCFC rather than rupee loan.

Eligibility Criteria

Who Can Apply:

Exporters who hold a valid Importer-Exporter Code and are bona‐fide exporters from India.
Exporters with confirmed export orders, irrevocable Letters of Credit or other acceptable evidence of export contract prior to shipment.
Units manufacturing or supplying goods/services for export, including those using domestic or imported inputs for export production.
Exporters opting to avail of credit in a convertible currency for the export consignments.

Who Cannot Apply:

Entities that are on the caution list of the Reserve Bank of India or otherwise non-compliant with export/foreign-exchange norms.
Export orders or shipments that are not backed by confirmed export contracts, LCs or acceptable documentation.
Use of funds for other domestic purposes unrelated to the export production/shipment cycle.
Cases where the exporter cannot liquidate the advance within the permissible period – then concessional rates or eligibility may be lost.

Documents Required

Importer-Exporter Code issued by Directorate General of Foreign Trade.
Copy of confirmed export order or irrevocable LC, with buyer details, quantity, shipment schedule.
Audited financial statements or business/working capital certificate indicating exporter creditworthiness.
Export contract/LC along with shipping documents .
Security/margin documents as required by bank (stock hypothecation, raw‐material inventory) and demand promissory note in foreign currency.
Bank account details , KYC of applicant and business entity.
If relevant, export licence/quota permit for restricted goods.

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Exporters who prefer expert assistance with cross-currency documentation, bank liaising and compliance.

Option 2: Direct Bank Process

Approach an authorised dealer bank branch (typically an ‘A’ or ‘B’ category branch) that handles PCFC facilities
Submit export order/LC documentation, IEC, business/financial credentials, and specify the required foreign currency credit amount.
Underwrite the credit based on export order value, production cycle, currency of drawal, interest rate linked to benchmark, and margin/stock requirements.
Once sanctioned, draw the foreign currency advance and utilise for procurement, manufacturing, processing and packing of goods for export.
After shipment and export realisation, liquidate the PCFC account with export bills/discounting or convert into post-shipment finance as per bank norms

Option 3: Official Bank/Online Export Credit Portal Submission
Visit your bank's export finance section or official portal, select “Packing Credit/PCFC” facility, fill the export finance application, upload required documents and select foreign currency drawal. The bank will review your submission, sanction the limit, and release the advance subject to export order and compliance with RBI guidelines.