Ecgc Group 5

8/6/2019 Ecgc Group 5

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Export Credit Guarantee Corporation

Presented by Group - 5

Simon Choudhury Smriti Pattnaik

Somyakant Mohapatra

Subhasis Mohanty

Sunil Kumar Singh

Swaroop Ranjan BagharTapan Kumar Jena

Titiksha Mohanty

Vaishali Joshi



What is ECGC?

� Export Credit Guarantee Corporation of India Limited, was established in the year1957 by the Government of India tostrengthen the export promotion drive by covering the risk of exporting on credit.



What does ECGC do?

� Provides a range of credit risk insurance covers toexporters against loss in export of goods and

services� Offers guarantees to banks and financial

institutions to enable exporters to obtain betterfacilities from them

� Provides Overseas Investment Insurance toIndian companies investing in joint venturesabroad in the form of equity or loan



How does ECGC help exporters?

� Offers insurance protection to exporters

against payment risks

� Provides guidance in export-related

activities

� Makes available information on differentcountries with its own credit ratings



How does ECGC help exporters?

� Makes it easy to obtain export financefrom banks/financial institutions

� Assists exporters in recovering bad debts

� Provides information on credit-worthinessof overseas buyers



Need for export credit insurance

� Risks even at the best of times

� W ar or civil war may block or delay payment

� Coup or an insurrection

� Balance of payment problems

� Insolvency or protracted default of buyers



Payment Risk

EXPORT INSURANCEEXPORT INSURANCE

Goods Receivables

Exchange

Risk

Loss or

Damage

Marine

Insurance

Hedging by

Authorized

Dealers

CREDIT

INSURANCE



RISK COVERED

COMMERCIAL RISKS± Insolvency of buyer/LC opening bank

± Protracted Default of buyer± Repudiation by buyer

POLITICAL RISKS± W ar/civil war/revolutions

± Import restrictions± Exchange transfer delay/embargo

± Any other cause attributable to importing country



LC

RISKS

POLITICAL RISK

COUNTRYBUYER BANK

LC / NON ± LC

COMMERCIAL RISK

Risks Covered by ECGC



� Standard Policy � Small Exporters policy � Specific Shipment Policy (short term)

� Export Turnover policy � Specific buyer wise policy � Consignment export policy � Global entity policy � Single buyer exposure policy � Multi buyer exposure policy

� Software project exports policy � IT enabled (single customer) policy � IT enabled (multi customer) policy � SME Policy � Customer specific policy (Tailor made)

Policies & Products



Shipments (Comprehensive

Risks) Policy

� Whole Turnover principle- all exports coveredSelective options for LC/Associates/Consignments

90% cover� Advance Premium subject to Minimum premium of Rs.10,000/-�Policy Period - 2 years�Credit limit (Drawee wise) on all the buyersMonthly declarations with premium due�Premium rates schedule issued with Policy �No claim Bonus ± every year 5% subject to maximum of 50%



Multi buyer exposure policy

� Cover on exposure as opposed to turnover and cover for more than 1 buyer� Discretion to choose buyers for cover with exporter and shall be acceptable

to ECGC� Processing Fee Rs.5000/- to accompany application

� List of buyers to be given with proposal and any addition to be advised� Minimum 10% of projected turnover will be fixed as Aggregate Loss Limit

(ALL) w hich will be the Maximum Liability � Exporter can opt for higher exposure than 10% of turnover� Cover for each buyer is 10% of ALL as Single Loss Limit (SLL)� Exporter to have access to ECGC website for checking defaulter buyer list.

� Coverage is 80% and lower cover available with proportionate reduction of premium. Single premium rate irrespective of country grading� Upfront premium payable before issue or in quarterly instalments� 5%No Claim Bonus reduction on renewal



MSME POLICY

� Policy issued for small exporters with ExportTurnover not exceeding Rs10 Lak hs andregistered under MSME Act, 2006

� Cover available upto Rs10 lak hs with annualpremium of Rs 5,000 and a processing fee of Rs1,000

� Cover available will be 90%

� Maximum claim payable is Rs3 lak hs on any buyer

� No requirement of monthly declaration of shipments



EXPORT FACTORINGSERVICES

� Factoring services involving finance, creditprotection, collection under one roof

� Finance against export receivables facilitatedthrough a bank

� Credit protection available after assessment of buyers

� Receivables financed without recourse� 80% prepayment against invoices and balance

after 90 days from due date less charges, if payment not received

� Details available at [email protected]



Export Credit InsuranceCovers to Banks

� Covers for working capital granted by commercial banks to Exporters at Pre

shipment and Post shipment stages� Covers available on exporter wise, bank

branch wise and bank wise

� Losses due to protracted default /Insolvency of exporters covered

� Cover varies from 60% to 95% dependingon the type of cover



Export Stimulus Package

� Additional cover of 5%, subject to maximum protectionof 95% available for all MSME exporters

� All exporters of Textiles ( including handicrafts and

handlooms), Gem & jewellery, leather, engineeringgoods, carpets, project goods, auto components andchemicals will also get the additional protection of 5%

� Additional cover through the National Export Insurance Account of the GOI

� Bank advances to MSME borrowers for exports will getan additional protection of 10% subject to maximumprotection of 85% under the Credit Insurance covers to

banks� Additional cover available for shipments /advances

made/ granted during the period 1st Jan 09 to 30th June09



Notable achievements

� Largest Policy ± short term Rs.250 crores

� Largest database on buyers 3 lak hs

� Largest credit limit Rs.80 Crores

� Largest claim paid Rs.120 crores

� Quickest claim paid 2 days� Highest compensation-Iraq Rs 788 Crores



Ecgc Group 5

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