Internationally, the bank offers forfaiting services for amounts upwards of $100,000. But in India, it will offer a minimum of $60,000 if the exporters have regular monthly shipments, said Ian Guild, adviser at Standard Bank London.

Guild, who is holding roadshows across the country to promote forfaiting, was confident that by December 1998 the bank would be able to do business worth $100,000,000 in India.

The bank's short-term spreads in India for periods up to one year will be 1.25 to 1.50 per cent while the long-term ones for periods up to five years will be 3.50 per cent.

The bank, which is operating in India on a profit-sharing basis with Triumph International Finance India Ltd, will offer forfaiting facilities to different sectors across the country. Guild said the bank was examining Pune'ssoftware industry "very closely" as all types of exports could avail of forfaiting.

Forfaiting is an alternative export finance tool that converts receivables into cash, with unconditional discounting, allowing exporters to receive cash and give credit. The debt instrument is discounted by the forfaiting agency at a pre-determined rate, allowing exporters to convert credit into cash sales.

Forfaiting is expected to benefit Indian exporters by opening up new markets since they would be able to offer long-term credit which they had not been able to do so far.

The Reserve Bank of India does not allow any Indian entity to carry forfaiting on its books, on the grounds that if there is a default, foreign exchange will not come into the country. The Exim Bank, however, issues a certificate to exporters to avail of forfaiting discounts, said Arvind Sonmale, deputy general manager at Exim Bank.