ECGC SCHEMES OF EXPORT

1.Maturity factoring

The Maturity Factoring scheme, as designed by ECGC has certain unique

features.Maturity Factoring scheme, thus effectively addresses the needs of
exporters to avail of pre-finance (advance) on the receivables, for their working
capital requirements. One important feature is the very important role and special
benefits envisaged for banks under the scheme.

2. Overseas investment guarantee

ECGC has evolved a scheme to provide protection for Indian Investments abroad.
Any investment made by way of equity capital or untied loan for the purpose of
setting up or expansion of overseas projects will be eligible for cover under
investment insurance. The risks of war, expropriation and restriction on remittances
are covered under the scheme.

3. Exchange Fluctuation Risk Cover

The Exchange Fluctuation Risk Cover is intended to provide a measure of

protection to exporters of capital goods, civil engineering contractors and
consultants who have often to receive payments over a period of years for their
exports, construction works or services. Where such payments are to be received in
foreign currency, they are open to exchange fluctuation risk as the forward
exchange market does not provide cover for such deferred payments.

4. Export (Specific Buyers) Policy

Buyer wise Policies - Short Term (BP-ST) provide cover to Indian exporters against
commercial and political risks involved in export of goods on short-term credit to a
particular buyer. All shipments to the buyer in respect of whom the policy is issued
will have to be covered (with a provision to permit exclusion of shipments under
LC).

  
5.Indivual Post-shipment export credit guarantee

Any bank or financial institution who is an authorized dealer in foreign exchange

can obtain the Individual Post-shipment Export Credit Cover in respect of each of
its exporter-clients who is holding the Standard Policy of ECGC without any
exclusion.

6. Constructions work policy

The Construction Works Policy of ECGC is designed to protect the Contractor

from 85% of the losses that may be sustained by him due to the following risks:
Insolvency of the employer (when he is a non-Government entity); Failure of the
employer to pay the amounts that become payable to the contractor in terms of the
contract, including any amount payable under an arbitration award; Restrictions on
transfer of payments from the employer's country to India after the employer has
made the payments in local currency, etc.

7. Buyer Exposure Policies

Two types of Exposure policies are offered, viz,

Exposure (Single Buyer) Policy – for covering the risks on a specified buyer and
Exposure (Multi Buyer) Policy – for covering the risks on all buyers.
An exporter can choose to obtain exposure based cover on a selected buyer. The
cover would be against commercial and political risks attached to the buyer for
both non-LC and LC transactions. A separate Buyer Exposure Policy will be issued
for each buyer covering all the exports to be made to the buyer during a period of
twelve months.

8. Transfer Guarantee

When a bank in India adds its confirmation to a foreign Letter of Credit, it binds
itself to honour the drafts drawn by the beneficiary of the Letter of Credit without
any recourse to him provided such drafts are drawn strictly in accordance with
the terms of the Letter of Credit. The confirming bank will suffer a loss if the
foreign bank fails to reimburse it with the amount paid to the exporter. he
Transfer Guarantee seeks to safeguard banks in India against losses arising out of
such risks.
9. Export performance Guarantee

For banks holding ECGC Whole-turnover Packing Credit Cover (ECIB-WTPC),

cover under EP shall be considered for all their standard accounts irrespective of
credit ratings. Against losses that the bank may suffer on account of bank
guarantees given by it on behalf of exporters and due to protracted default or
insolvency of the exporter-client

10. Export finance (overseas lending) guarantee

If a bank financing an overseas project provides a foreign currency loan to the

contractor, it can protect itself from the risk of non-payment by the contractor by
obtaining Export Finance (Overseas Lending) Guarantee. Claims under the
Guarantee will also be paid in Indian Rupees.

11. Software project policy

The Services Policies of the Corporation were offered to provide protection of

exporters of services including software and related services. However it was
found that the general services policy does not meet with the exact requirements
of software exporters. It was therefore decided to introduce a new credit
insurance cover to meet the needs of the software exporters, namely, software
projects policy, where the payments will be received in foreign exchange.

12. Insurance Cover for Buyer's Credit And Line of Credit

ECGC has evolved schemes to protect the lending banks from certain risks of non-
payment. These covers take the form of an agreement between the lending bank
and ECGC and are issued on a case to case basis. Credit terms and the length of the
credit period should be in conformity with what is appropriate for the export of the
relevant items. There should be adequate security for the repayments to be made
by the borrower. Cover can be granted either for political risks or for
comprehensive risks.

13. Service Policy

Specific Services Policy, as its name indicates, is issued to cover a single specified
contract. It is issued to provide cover for contracts, which are large in value and
extend over a relatively long period. Whole-turnover services policies are
appropriate for exporters who provide services to a set of principals on a repetitive
basis and where the period of each contract is relatively short.

14. Consignment Exports Policy(stock holding agent and global entity)

One of the methods being increasingly adopted by Indian exporters after

ibrelization is consignment exports where the goods are shipped and held in stock
overseas ready for sale to overseas ready for sale to overseas buyers, as and when
orders are received. To protect the Indian Exporters from possible losses when
selling goods to ultimate buyers, it was decided to introduce Consignment Policy
Cover.

15. Specific Policy for Supply Contract

The Standard Policy is a whole turnover policy designed to provide a continuing

insurance for the regular flow of an exporter's shipments for which credit period
does not exceed 180 days. Contracts for export of capital goods or turnkey projects
or construction works or rendering services abroad are not of a repetitive nature
and they involve medium/long-term credits. Such transactions are, therefore,
insured by ECGC on a case-to-case basis under specific policies.

16. Specific Shipment Policy

Specific Shipment Policies - Short Term (SSP-ST) provide cover to Indian

exporters against commercial and political risks involved in export of goods on
short-term credit not exceeding 180 days. Exporters can take cover under these
policies for either a shipment or a few shipments to a buyer under a contract.

17. SCR or Standard Policy

Shipments (Comprehensive Risks) Policy, commonly known as the Standard

Policy, is the one ideally suited to cover risks in respect of goods exported on
short-term credit, i.e. credit not exceeding 180 days. This policy covers both
commercial and political risks from the date of shipment. It is issued to exporters
whose anticipated export turnover for the next 12 months is more than Rs.50 lacs.
18. Export Turnover Policy

Turnover policy is a variation of the standard policy for the benefit of large
exporters who contribute not less than Rs. 10 lacs per annum towards premium.
Therefore all the exporters who will pay a premium of Rs. 10 lacs in a year are
entitled to avail of it.

19. IT-enabled Services (Specific Customer) Policy

IT-enabled Services (Specific Customer) Policy is issued to cover the following

commercial and political risks involved in rendering IT-enabled services to a
particular customer: Commercial risk like insolvency of customers, buyers failure
to accept the services rendered.Bank risk like bankruptcy of L/c opening bank,
failure of L/c to make payment due within a specified period and political risk like
cancellation of contracts by goverment etc

20. Small Exporters Policy

The Small Exporter's Policy is basically the Standard Policy, incorporating certain
improvements in terms of cover, in order to encourage small exporters to obtain
and operate the policy. It is issued to exporters whose anticipated export turnover
for the period of one year does not exceed Rs.50 lacs.

21. Packing Credit Guarantee

The Packing Credit Guarantee of ECGC helps the exporter to obtain better and
adequate facilities from their bankers. The Guarantees assure the banks that, in the
event of an exporter failing to discharge his liabilities to the bank, ECGC would
make good a major portion of the bank's loss. The bank is required to be co-insurer
to the extent of the remaining loss.