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EXPORT CREDIT INSURANCE

Credit Insurance Covers to exporters against Credit Risk losses in export of goods & services both under Short term and Medium and LT Credit Insurance covers to banks to protect them against risks of non payment by exporters both under Short term and Medium and LT

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EXPORT CREDIT INSURANCE

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  1. Credit Insurance Covers to exporters against Credit Risk losses in export of goods & services both under Short term and Medium and LT CreditInsurance covers to banks to protect them against risks of non payment by exporters both under Short term and Medium and LT Domestic Credit Insurance covers toExporters and Banks in respect of their local sales and working capital finance, respectively Overseas Investment Insurancecovers to protect Indian Entrepreneurs investing in Overseas Ventures (Equity/Loans) against expropriation risks Exchange Fluctuation Covers to exporters to protect them in respect of their exchange losses under Medium and LT exports EXPORT CREDIT INSURANCE

  2. Provides credit risk covers to Exporters against non payment risks of the overseas buyers / buyer’s country in respect of the exports made. Provides credit Insurance covers to banks against lending risks of exporters Assessment of buyers for the purpose of underwriting Preparation of country reports International experience to enhance Indian capabilities An ISO organisation excelling in credit insurance services ECGC – An Export Promotion Institution

  3. VISION To excel in providing credit insurance and trade-related services. • MISSION To support the Indian Export Industry by providing cost-effective insurance and trade-related services to meet the growing needs of the Indian export market through the optimal utilization of available resources.

  4. No. of offices 5 Regional offices and 51 Branches ( Head office and all Branches ISO certified) Paid Up Capital Rs 900 Cr Reserves Rs 913.42 Cr IRDA registered Insurance company classified under General Insurance-Specialised Institution Data for 2007-08 Premium Income Rs 668.36 Cr Claims paid Rs 419.74 Cr Recoveries Rs 161.50 Cr No. of Policies in force 12533 No. of shipments covered 364848 No. of buyers covered 46799 No. of countries covered 193 No. of banks holding covers 65 No. of bank branches covered 3709 No. of exporters financed by banks 20568 A Brief Profile of ECGC

  5. Statistics

  6. EXPORT INSURANCE Goods Receivables Loss or Damage Exchange Risk Payment Risk Hedging by Authorized Dealers CREDIT INSURANCE Marine Insurance

  7. Risks Covered by ECGC RISKS POLITICAL RISK (Open Cover and Restricted cover ) COMMERCIAL RISK COUNTRY BUYER BANK LC / NON –LC LC

  8. COMMERCIAL RISKS Insolvency of buyer/LC opening bank Protracted Default of buyer Repudiation by buyer POLITICAL RISKS War/civil war/revolutions Import restrictions Exchange transfer delay/embargo Any other cause attributable to importing country RISKS COVERED

  9. 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) Products offered to Exporters

  10. Whole Turnover principle- all exports covered Selective 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 buyers Monthly declarations with premium due Premium rates schedule issued with Policy No claim Bonus – every year 5% subject to maximum of 50% Shipments ( Comprehensive Risks) Policy

  11. Export turnover not exceeding Rs.50 Lakhs per annum Advance Premium subject to Minimum Premium Rs.2000/- Policy Period - one year Cover for Commercial risks 95% and Political risks 100% No Claim bonus applicable Quarterly Declarations Premium payment as per standard premium schedule attached to Policy Small Exporters Policy

  12. Minimum anticipated Premium of Rs.10 Lakhs Period of Policy- One year Monthly or quarterly declaration as per exporter’s choice Higher Discretionary Limit of drawee wise limits on buyers (uptoRs100 lakhs for DP and Rs50 lakhs for DA) Premium rates discounted by 20% Premium payable upfront or in Quarterly instalments based on anticipated exports 5% cash discount for upfront payment of full annual premium Export Turnover Policy

  13. Covering one shipment or One contract Processing fee of Rs.1000/- 80% cover Premium higher than standard premium rates Upfront premium before issue of Policy Commercial / Political risks and L/C comprehensive risks covered Submission of Shipment Statement and realisation report later Specific Shipment Policy (SSP)

  14. Covering One buyer / One Bank Processing fee Rs.1000/- Period of cover - One year All shipments to buyer on Non LC terms or shipments under LC from bank covered Quarterly/Annual premium payable upfront based on projected exports 80% cover Monthly or quarterly shipment statements 5% No Claim Bonus reduction on renewal Specific Buyer wise Policy

  15. Cover issued on exposure basis as opposed to turnover ( Exposure: Likely outstanding at any given point of time) One time payment of premium on exposure Single Premium rate based on country rating for Comprehensive risks/Political risks Processing fee Rs.1000/- on application Cover is up to Exposure or the Loss limit (Credit Limit) Premium payable either quarterly or annually on the loss limit No monthly statements Annual statement of shipments at the end of Policy period on renewal Coverage is 80% Selective cover for each buyer at exporter’s discretion Buyer Exposure Policy

  16. 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) which 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 Multi buyer exposure policy

  17. Consignment exports covered under this exclusive cover for a period of 1 year Premium on shipments to the agent payable on the turnover Upfront premium quarterly / annually Coverage 80%. Exporters holding Standard Policy will get 90% cover One Agent / Multiple buyers Cover on agent or on ultimate buyers as desired by exporter Credit limits (Drawee wise limits) to be obtained on ultimate buyers Discretionary Credit limit available upto 5% of turnover with max of Rs100 lakhs Longer period of 360 days for realization of bills Premium payable on the basis of country classification and tenor of 90/180/360 days. Extension upto 540 days permissible with additional premium 5% No Claim Bonus reduction on renewal Consignment (Stock holding Agent) Policy

  18. Coverage for selling goods through exporter’s own subsidiary or branch office during a period of 1 year Premium on shipments to the GE payable on the turnover Upfront premium quarterly / annually Coverage 80%. Exporters holding Standard Policy will get 90% cover One GE / Multiple buyers Cover on GE or on ultimate buyers as desired by exporter Commercial cover of Insolvency of GE only if Joint stock company and equity stake not exceeding 49%; Otherwise only Political risks cover Credit limits (Drawee wise limits) to be obtained on ultimate buyers Discretionary Credit limit available upto 5% of turnover with max of Rs100 lakhs Longer period of 360 days for realization of bills Premium payable on the basis of country classification and tenor of 90/180/360 days. Extension upto 540 days permissible with additional premium 5% No Claim Bonus reduction on renewal Consignment Exports (Global Entity) Policy

  19. Policy issued for small exporters with Export Turnover not exceeding Rs10 Lakhs and registered under MSME Act, 2006 Cover available upto Rs10 lakhs with annual premium of Rs 5,000 and a processing fee of Rs1,000 Cover available will be 90% Maximum claim payable is Rs3 lakhs on any buyer No requirement of monthly declaration of shipments MSME POLICY

  20. Factoring services involving finance, credit protection, collection under one roof Finance against export receivables facilitated through 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 on specific request at factoring@ecgc.in EXPORT FACTORING SERVICES

  21. 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% depending on the type of cover Export Credit Insurance Covers to Banks

  22. Additional cover of 5%, subject to maximum protection of 95% available for all MSME exporters All exporters of Textiles ( including handicrafts and handlooms), Gem & jewellery, leather, engineering goods, carpets, project goods, auto components and chemicals 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 get an additional protection of 10% subject to maximum protection of 85% under the Credit Insurance covers to banks Export Stimulus Package

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