ECGC encourages exporters India!
Union Minister of Commerce and Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal lauded the support and encouragement provided to exporters by ECGC Ltd. The Minister emphasized the importance of transparency and simplification of procedures and said that all the procedures at ECGC Ltd. will be made completely digital in the next few months.
The Minister said that the digitisation of processes at ECGC will enhance the convenience for the exporters. Shri Goyal also said that a new grievance redressal mechanism at ECGC Ltd. will be established where a Live video-conference facility will be available daily for one hour on the website of ECGC Ltd.
Last year ECGC Ltd. extended cover under Export Credit Insurance for banks (ECIB) scheme for the accounts with export credit working capital limits up to Rs. 20 crore sanctioned by the banks (excluding Traders and GJD Exporters) with enhanced cover of 90%.
Four banks namely SBI, Central Bank of India (CBI), Bank of Maharashtra and Saraswat Bank have so far opted for the enhanced cover. The experience under the cover has been satisfactory in terms of low default ratio in the last one year. Goyal said that the extended cover under the scheme has resulted in easing of interest rates on the credit/loans obtained from the banks.
The Minister announced that the benefit of the enhanced cover will be extended to the accounts with limits up to Rs. 50 crore for above four banks without any additional cost. It is expected that around 3000 exporter-borrower accounts will benefit from this.
For nine banks where six-year claim to premium ratio (CPR) is less than 70%, cover for accounts with export credit working capital limits up to Rs. 20 crore will be offered enhanced cover of 90% without any additional cost provided the banks are extending the export credit at an interest rate corresponding to the accounts rated ‘AA’ (or with equivalent rating). Around 3000 exporter- borrower accounts will be supported by the enhanced cover under WT-ECIB for such banks.
This product was first of its kind in the export credit insurance industry all across the globe. The product facilitates the borrower accounts to be treated equivalent to ‘AA’ rated accounts with reduced cost of export credit to the exporters.
ECGC Ltd. will provide enhanced cover under the policy covers (providing protection against commercial and political risks on account of the overseas buyers) issued to the exporters in the policies available for sale in all the channels.
100% cover will be provided for existing policyholders where ‘No Claim Bonus (NCB)’ is 50% and the policy proposal has been received directly from the exporters and not through insurance brokers. 5% additional cover under the policies will be given where the proposal is received directly from the exporter and not through insurance brokers.
During FY 2022-23, ECGC Ltd. supported more than 16,000 exporters with an aggregate value of business covered to the tune of Rs.6.68 lakh crore. CMD, ECGC, M. Senthilnathan said that the business covered value is expected to increase to more than Rs.10 lakh crore in the current FY.
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