EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

A PRESENTATION
ON THE CREDIT
INSURANCE
PRODUCTS

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

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
• Domestic Credit Insurance covers to Exporters and Banks in
respect of their local sales and working capital finance, respectively
• Overseas Investment Insurance covers 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

ECGC – An Export Promotion Institution

– 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

 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.

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

A Brief Profile of ECGC

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Statistics
Particulars Initial Years (1957-60) 2007-08

Premium Rs 43,109 (1957-58) Rs 668.36 crores

Claims Rs 4.51 lacs (1960) Rs 419.74 crores

Recoveries Rs 2.00 lacs (1960) Rs 161.50 crores

Value of Rs 1.30 crores(1957 -58) Rs 52766.57 crores

shipments
covered
Policies in Force 146 no. (1957-58) 12533 no.

No. of banks 3 no. (1960) 65

covered under
Guarantees
No. of bank 3 no. 3709 no.
branches
Paid up Capital Rs 50.00 lacs Rs 900 crores

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

EXPORT INSURANCE

Goods Receivables

Loss or Exchange Payment Risk

Damage Risk

Hedging by CREDIT
Marine
Authorized INSURANCE
Insurance
Dealers

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Risks Covered by ECGC

RISKS

POLITICAL RISK
(Open Cover COMMERCIAL RISK
and
Restricted cover )

BUYER BANK
COUNTRY

LC / NON – LC LC

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

RISKS COVERED

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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Products offered to Exporters

• 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)

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Shipments ( Comprehensive
Risks) Policy
• 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%
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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Small Exporters Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Export Turnover Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Specific Shipment Policy (SSP)

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Specific Buyer wise Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Buyer Exposure Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

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) 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Consignment (Stock holding Agent) Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Consignment Exports (Global Entity) Policy

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

MSME POLICY
• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

EXPORT FACTORING SERVICES

• 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

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Export Credit Insurance Covers 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%
depending on the type of cover

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

Export Stimulus Package

• 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
• Additional cover available for shipments /advances made/
granted during the period 1st Jan 09 to 30th June 09

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 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED

In the Service of Exporters and

Banks since 1957

Thank You

Please visit us at: www.ecgc.in

Mail us at marketing@ecgc.in

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