INTRODUCTION OF ECGC

Export Credit Guarantee Corporation of India Ltd. ( ECGC ) is a Government of India

Enterprise which provides export credit insurance facilities to exporters and banks in India. It
functions under the administrative control of Ministry of Commerce & Industry, and is
managed by a Board of Directors comprising representatives of the Government, Reserve Bank
of India, banking and insurance and exporting community. Over the years, it has evolved
various export credit risk insurance products to suit the requirements of Indian exporters and
commercial banks. ECGC is the seventh largest credit insurer of the world in terms of coverage
of national exports. The present paid up capital of the Company is Rs. 900 Crores and the
authorized capital is Rs. 1000 Crores.

The Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly
owned by the Government of India based in Mumbai, Maharashtra. It provides export
credit insurance support to Indian exporters and is controlled by the Ministry of
Commerce. Government of India had initially set up Export Risks Insurance
Corporation (ERIC) in July 1957. It was transformed into Export Credit and Guarantee
Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee of India in 1983
ECGC is essentially an export promotion organization, seeking to improve the competitive
capacity of Indian exporters by giving them credit insurance covers comparable to those
available to their competitors from most other countries. It keeps its premium rates at the

lowest level possible.

Payments for exports are open to risks even at the best of times. The risks have assumed large
proportions today due to the far-reaching political and economic changes that are sweeping the
world. An outbreak of war or civil war may block or delay payment for goods exported. A coup
or an insurrection may also bring about the same result. Economic difficulties or balance of
payment problems may lead a country to impose restrictions on either import of certain goods
or on transfer of payments for goods imported. In addition, the exporters have to face
commercial risks of insolvency or protracted default of buyers. The commercial risks of a
foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political
and economic uncertainties. Export credit insurance is designed to protect exporters from the
consequences of the payment risks, both political and commercial, and to enable them to
expand their overseas business without fear of loss.

HISTORY OF ECGC
The need for export promotion had started immediately after Independence in 1947.
In 1953, a proposal for initiation of an export credit guarantee scheme was put forward at a
meeting of the Export Advisory Council. Ministry of Commerce & Industry
analyzed in depth the pros and cons of the Export Credit
Insurance Scheme and a revised draft proposal on the
scheme were presented to the Export Advisory
Council in 1955.

Shri T T Krishnamachari, Finance Minister in Pandit Nehrus cabinet appointed a special

committee under the Chairmanship of Shri T.C.Kapur to examine the feasibility of setting up an
effective organization to provide insurance against export credit risks. The Government accepted
the recommendations of Kapur Committee and thus the Export Risk Insurance Corporation

(ERIC) was registered on 30th July 1957 in Mumbai as a Private Ltd. Company, entirely state
owned, under the Companies Act with an authorized capital of Rs.5 crores and paid up capital of
Rs.25 lakhs. Shri Ratilal M Gandhi was the First Chairman and Shri T C Kapur was the First
Managing Director of the Corporation. Shri Morarji Desai, Union Commerce Minister
inaugurated ERIC and the first Policy was issued on 14th October 1957.

After introduction of insurance covers to banks during the period 1962-64, ERICs name was
changed to Export Credit & Guarantee Corporation Ltd in 1964.

To bring Indian identify in the name, ECGC was renamed as Export Credit Guarantee
Corporation of India Ltd in the year 1983.

WHAT DOES ECGC DO?

Provides a range of credit risk insurance covers to exporters against loss in export of goods and
services.
Offers Export Credit Insurance covers to banks and financial institutions to enable exporters to
obtain better facilities from them.
Provides Overseas Investment Insurance to Indian companies investing in
abroad in the form of equity or loan.
Offers insurance protection to exporters against payment risks
Provides guidance in export-related activities

joint ventures

Makes available information on different countries with irs own credit ratings
Makes it easy to obtain export finance from banks/financial institutions
Assists exporters in recovering bad debts
Provides information on credit worthiness of overseas buyers.

SOURCE: http://agriexchange.apeda.gov.in/Ready%20Reckoner/ECGC.aspx

OBJECTIVES

The Corporation has set before itself the following objectives:

1. To encourage and facilitate globalization of Indias trade.
2. To assist Indian exporters in managing their credit risks by providing timely information on
worthiness of the buyers, bankers and the countries.
3. To protect the Indian exporters against unforeseen losses, which may arise due to failure of
the buyer, bank or problems faced by the country of the buyer by providing cost effective
credit insurance covers in the form of Policy, Factoring and Investment Insurance Services
comparable to similar covers available to exporters in other countries.
4. To facilitate availability of adequate bank finance to the Indian exporters by providing surety
insurance covers for bankers at competitive rates.
5. To achieve improved performance in terms of profitability, financial and operational
efficiency indicators and achieve optimum return on investment.
6. To develop world class expertise in credit insurance among employees and ensure
continuous innovation and achieve the highest customer satisfaction by delivering top quality
service.
7. To educate the customers by continuous publicity and effective marketing.

CHAPTER 1. Types of investment

CHAPTER 2. Export credit insurance for exporters
CHAPTER 3. Export credit insurance for banks
CHAPTER 4. Special schemes
CHAPTER 5. Performance of ecgc
CHAPTER 6. Ethics and responsibilities
CHAPTER 7. NEIA and awards
CHAPTER 8. Policies
CHAPTER 9. Recent activities
CHAPTER 10. Strategic planning

CHAPTER 11. Field Visit: Bank Of India

CHAPTER 12. Field Visit: Bank Of Baroda

HEAD OFFICE
Express Towers, 10th Floor,

National Marketing Division

Nariman Point, Dalamal House, 2nd floor,

Mumbai-400 021.

West Wing, J.B. marg,

Nariman Point
Mumbai 400 021

MANAGEMENT

SOURCE: http://voguesecurity.net/content/managing-ourcontract

BOARD OF DIRECTORS

o CHAIRMAN CUM MANAGING DIRECTOR

Shri N Shankar
Chairman cum Managing Director
ECGC of India Limited, Mumbai
o DIRECTORS -GOVT OF INDIA
Shri Arvind Mehta

Dr. Alok Sheel

Joint Secretary

Joint Secretary

Department of Commerce

Department of Economic Affairs,

Ministry of Commerce & Industry,

Ministry of Finance,

Govt. of India,

Govt. of India,

New Delhi

New Delhi

INSTITUTIONS, COMMERCIAL BANKS & EXPORTERS

Shri V. S. Das

Shri T. C. A. Ranganathan

Executive Director

Chairman cum Managing Director

Reserve Bank of India,

Exim Bank of India,

Mumbai

Mumbai

Shri K. R. Kamath

Shri A K Roy,

Chairman & Managing Director,

Chairman cum Managing Director,

Punjab National Bank,

General Insurance Corporation of India

New Delhi

(GIC)
Mumbai.

Shri Hari S. Bhartia

Shri M.Rafeeque Ahmed

Co-Chairman and Managing Director,

President,

M/s Jubilant Life Sciences Ltd.,

FIEO,

New Delhi (Exporter)

New Delhi

Shri Vasant Mehta

M/s V. Rameshchandra & Company,Mumbai

(Exporter)

SENIOR EXECUTIVES

Shri N Shankar
Chairman cum Managing Director

Smt.Geetha Muralidhar
Executive Director

TYPES OF INVESTMENT
The overseas investment may be made either by way of equity or by way of loans.
Equity:

Any contribution made to the enterprise in return for shares either by cash remittances or by way
of export of capital goods or services can be covered. Any fees payable towards technical
knowhow, consultancy or management services etc., and agreed to be converted into capital will
be considered for cover at the discretion of the Corporation.

Loans:
Loans advanced by way of a formal agreement but not tied to export of goods and supplies are
eligible for cover. Any 'suppliers/buyers' credits and lines of credit extended to support sale of
goods or services from India may be covered under the appropriate insurance schemes of the
Corporation and not under investment insurance.

Dividend and profit:

In case of equity the investor can choose to cover the original investment as well as his share of
retained earnings and dividends declared, to the extent they are eligible for repatriation. Cover on
account of original investment, retained earnings, dividend receivable and any additional
investment will be subject a ceiling of 150 per cent of the original investment calculated as in the
proceeding paragraphs. In case of loan, the insurance will cover the principal as well as interest
actually earned.

Portfolio investment:
Any investment in shares of overseas concerns not related to setting up, development and
expansion of overseas projects would not be eligible for cover under the investment insurance.

Additional investment:
Additional investment can be covered subject to a ceiling of 50 per cent of the original
investment. Any additional investment out of retained earnings should have been made by formal
capitalisation and for the purpose of expansion for development of the enterprise. If the
additional investment is made out of retained profits, which are not eligible for repatriation, such
an investment will not be eligible for cover. Initially, cover is issued for three years. On expiry of
the three years it is at the option of the exporter to renew the cover/review of the JV/WOS by
ECGC. The duration of insurance cover shall not normally exceed 15 years but extension can be
given up to 20 years for longer projects. The amount of investment eligible for cover shall be to
the full extent during the first 10 years of cover. Percentage of cover is 90-can be reduced. The
amount of investment eligible for cover will be reduced to 90 per cent, 80 per cent, 70 per cent,
60 per cent and 50 per cent, respectively, of the original investment during the 11th, 12th, 13th,
14th and 15th years of insurance. OII provides cover for original investment retained earnings,
dividend receivables and additional investment up to 50 per cent of the original investment.
Cover for dividend receivables may not be given in case of risky countries; cover only for
original investment. OII covers only political risks of war, expropriation and restrictions on
remittances.

Premium rate: Base rate: 1 per cent of the investment value. Actual premium rate will depend
on the size of investment, country of investment, previous experience of the Importer etc.
The exporter has to furnish the proposal form along with a fee of 1 per cent of the investment
amount subject to a ceiling of Rs 25,000. If cover is agreed application fee paid shall be adjusted

towards premium payable. In case the application for insurance is rejected, half the fee paid shall
be refunded. Premium is taken upfront. Income from the premium is allocated over the tenor of
the cover extended. Installment facility is provided by ECGC for collecting premium after
analysing

and

approving

the

proposal.

ECGC enters into agreement with the exporters for providing cover mentioning the terms and
conditions along with the maximum liability. The exporters have to submit annual reports about
the progress and working of the projects.

EXPORT CREDIT INSURANCE FOR EXPORTER

SHORT TERM

A Turnover Based
Shipment Comprehensive Risk Policy - (SCR)
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. (The appropriate policy for exporters with an anticipated
turnover of Rs.50 lacs or less is the Small Exporter's Policy, described
separately).

Small Exporter Policy - (SEC)

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. The
nature of commercial risks and political risks cover is similar to that of the
Shipment Comprehensive Risk (SCR) or Standard policy.

Specific Shipment Policy - (SSP)

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. These policies can be availed of by exporters who do not hold SCR
Policy .

Services Policy - (SRC)

Where Indian companies conclude contracts with foreign principals for

providing them with technical or professional services, payments due under the
contracts are open to risks similar to those under supply contracts. In order to
give a measure of protection to such exporters of services, ECGC has
introduced the Services Policy.

Export Turnover Policy - (ETP)

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.

Export Specific Buyer Policy - (BWP)

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). These policies can be availed of by
(i) Exporters who do not hold SCR Policy and
(ii) By exporters having SCR Policy,
In case all the shipments to the buyer in question have been permitted to be excluded from the
purview of the SCR Policy.

 Consignment Exports Policy - (CEP)

Economic liberalization and gradual removal of international barriers for trade and commerce are
opening up various new avenues of export opportunities to Indian exporters of
quality goods. One of the methods being increasingly adopted by Indian
exporters 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. The Consignment Policy cover protects the Indian
Exporters from possible losses when selling goods to ultimate buyers.
There are two policies available for covering consignment export viz;

Consignment Exports (Stock-holding Agent)

Consignment Exports (Global Entity Policy)

B EXPOSURE BASED

Buyer Exposure Policy - (BEP)

Presently, in the policies offered to exporters premium is charged on the export turnover, though
the Corporations exposure on each buyer is controlled through a system of approval of credit
limits on the buyer for covering commercial risks. While this suits the small and medium
exporters, ma ny large exporters having large number of shipments have been complaining about
the volume of returns to be filed under the policy necessitating the deployment of their resources

for this purpose and also resulting in possible unintentional omissions or

commissions in such reporting, which have an impact on the settlement of
claims.
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.

IT-Enabled Services Policy - (ITES)

IT-enabled Services Policy is issued to cover the following commercial and
political risks involved in rendering IT-enabled services to a particular
customer:
Commercial Risks:
Insolvency of the customer.
Failure of the customer to make the payment due within a specified period,
normally four months from the due date.
Buyer's failure to accept the services rendered (subject to certain conditions).

Bank risks :

Bankruptcy of L/c opening bank.

Failure of L/c opening bank to make the payment due within a specified period,
normally within four months from the due date (Non-payment due to discrepancies in
the document will not be covered).

Political risks:

Imposition of restrictions by the Government of the customers country or any Government

action which may block or delay the transfer of payment made by the customer;
War, civil war, revolution or civil disturbances in the customers country
New import restrictions or cancellation of a valid import license by authorities in the customers
country;
Cancellation by the Govt. of India a legally valid and binding contract between the exporter and
the customer.

Small & Medium Enterprise - (SME)

ECGC introduced a Policy exclusively for the SME sector units in 4th July, 2008. The Policy
particularly provides the SME Sector easy administrative and operational convenience.
Details of SME policy
1. Policy period: 12 months
2. Processing Fees: Rs.1000
3. Credit limit fees: No
4. Declarations: No
5. Premium: Rs5000
6. Maximum Loss Limit: Rs.10 lacs
7. Single Loss Limit: Rs. 3 lacs
8. Report of overdue: more than 60 days from the due date
9. Waiting period: 2 months from the due date or extended Due date
10. Percentage of cover: 90%

This Policy is meant for exporters engaged in manufacturing activities having invested in plant
and machinery or engaged in export of services having invested in equipment as per MSMED
Act, 2006. This Policy can be issued to an exporter qualifying as per the MSMED Act, 2006.

This Policy can be issued to an exporter qualifying as per the MSMED Act, 2006. The exporter
desirous of obtaining the Policy should furnish the certificate issued by the designated authority.
(District Industries Centers)

EXPORT CREDIT INSURANCE FOR BANKS

 SHORT TERM
Pre Shipment (PC) -

Whole Turnover Packing Credit - (WTPC)

A bank or a financial institution dealing in foreign exchange is eligible

to obtain this Whole-turnover Cover for all its accounts.
Period Of Cover: 12 Months

Branch Wise Packing Credit - (BIPC)

A branch of a bank or a financial institution authorized to deal in foreign
exchange

the Branch-wise Packing Credit Cover in respect of one or

more of its exporter clients has been classified as a standard asset and
whose Credit is acceptable to ECGC.
Period Of Cover: 12 Months

Export Credit Insurance For Banks ECIBINPS(Without Any Exclusion)

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.
Period Of Cover: 12 months

Export Credit Insurance For Banks Individual Post

-Shipment (ECIB -INPS) for Non -Policy
Holders

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 not holding the Standard Policy of
ECGC.
Period Of Cover:
12 months

ECIB_INPS (Excluding Cover for Shipments Made

Against LC)
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 appropriate
Comprehensive Risks Policy of ECGC excluding cover
for shipments made against L/Cs.
Period Of Cover:
12 months

Whole Turnover Post Shipment - (WTPS)

Eligibility
A bank or a financial institution dealing with foreign
exchange is eligible to obtain this Whole-turnover Cover
for all its accounts.
Period Of Cover:
12 months

Export Finance (EF)

Eligibility
Any bank authorized to deal in foreign exchange can obtain

the Export Finance Cover in respect of its exporter-client who

has been classified as a standard asset and whose Credit Rating
is acceptable to ECGC
Period Of Cover:
12 months

Individual Export Performance (IN-EP)

For banks holding ECGC Whole-turnover Packing Credit
Cover (ECIB-WTPC), cover under EP shall be
considered for all their standard accounts. In respect of
other banks, it shall be only for standard accounts with
acceptable credit ratings.
Period Of Cover:
As per the period of the bank guarantee. 12 Months

Whole Turnover Export Performance (WT-EP)

For banks holding ECGC Whole-turnover Packing Credit Cover (ECIB-WTPC),
cover under EP shall be considered for all their standard accounts. In respect of
other banks, it shall be only for standard accounts with acceptable credit ratings.
Period Of Cover:
12 months

 Individual Packing Credit - (INPC)

Packing credit cover can be obtained by the bank that provides advances/credit
facilities to the exporters for the purposes of manufacturing, processing, purchasing
and/ or packing of goods granted by banks to exporters who enter into contracts for
export of services or undertaking construction works abroad. The cover provides
protection to the banks against losses suffered on account of non-payment of
advances/credit facilities due to insolvency and/ or default of the borrower exporter.
Period Of Cover:
12 months

Individual Post Shipment-(INPS)

Any bank or financial institution who is an authorized dealer in foreign exchange
that provides post-shipment finance to the exporter by way of purchase, negotiation
or discount of export bills after the shipment has been affected pertaining to a
particular project.
Risks Covered: Protracted default or insolvency of the exporter-client.
Period Of Cover: 12 months

EXPORT CREDIT INSURANCE-EXPORT PERFORMANCE (ECIB-EP)

During execution of projects exporters are required to furnish bonds duly supported by bank
guarantees at various stages starting from bidding, Advance Payment, Due Performance to

releasing retention money which is furnished for completion of defects/warranty period. The
exporter furnishes Advance payment bond for receiving advance payment and due performance
bond for assuring due performance of the contract.
Risks Covered

Insolvency of Borrower
Protracted Default of Borrower

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.

ECIB Cash Flow Deficit Financing

The bank financing an overseas project may be required to extend loan to the
contractor to overcome cash flow deficits and ensure smooth and timely execution
of the project. Such loans can also be granted to the contractors for execution of
deemed export projects in India. The cover provides protection to the banks against
losses that bank may suffer due to insolvency and default of the borrower.

Buyer's Credit Cover

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

Buyer's Credit is a credit extended by a bank in India to an overseas
buyer enabling the buyer to pay for machinery and equipment that he
may be importing from India for a specific project. A Line of Credit is
a credit extended by a bank in India to an overseas bank, institution or
government for the purpose of facilitating import of a variety of listed
goods from India into the overseas country. A number of importers in
the overseas country may be importing the goods under one Line of
Credit.

SPECIAL SCHEMES

Transfer Guarantee

When a bank in India adds its confirmation to a foreign Letter of

Credit, it binds itself to honor 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. This may happen due to the
insolvency or default of the opening bank or due to certain political
risks such as war, transfer delays or moratorium, which may delay or
prevent the transfer of funds to the bank in India. The Transfer
Guarantee seeks to safeguard banks in India against losses arising out
of such risks.
Transfer Guarantee is issued, at the option of the bank to cover either political risks alone, or
both political and commercial risks. Loss due to political risks is covered up to 90% and loss
due to commercial risks up to 75%.

Overseas Investment Insurance

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 investment may be either in cash
or in the form of export of Indian capital goods and services. The cover
would be available for the original investment together with annual
dividends or interest receivable. The risks of war, expropriation and
restriction on remittances are covered under the scheme. As the investor
would be having a hand in the management of the joint venture, no cover
for commercial risks would be provided under the scheme.

Customer Specific Policy Cover

In order to cater to the specific need for export credit insurance cover, of reputed large
value exporters which otherwise could not be fully addressed under any one of
standard products , the customer specific policies have been introduced and are issued
to large exporters on a selective basis on the merits respective requests for such
cover. Normally such policies are issued without changing the basic risk cover
profile of the export transaction. Some of the features of customer specific policies are as under.

Policies can be issued combining feature of more than one standard type(Off the shelf) policies;
Policies are issued with the base cover of an appropriate standard policy with added feature from
other standard policies if required;
Customer specific policies are considered only in respect of cases where anticipated annual
premium is more than Rs.10 lacs;
The customers policies are issued in line the credit insurance covers approved by IRDA.

PERFORMANCE OF ECGC DURING LAST FISCAL

Last year's performance has been reasonably good.

Premium income actually crossed Rs 1,000 crore; rose to Rs 1,005 crore from Rs
885 crore.
Correspondingly claims payment went up to Rs 713 crore from Rs 621 crore.
Recovery has been higher at Rs 169 crore against Rs 137 crore. Because of the
current global financial situation claims paid will be higher.
You see, we are in the service of promoting exports. Our business has two
components: one, direct insurance cover to exporters where we cover risk on the
overseas buyers. The other is the cover to banks in India which provide credit to
exporters.

This business has been higher last year with the premium touching Rs 630 crore
from Rs 533 crore.

RECENT DEVELOPMENT

SOURCE:http://www.google.co.in/imgres?q=growing+business
Largest Policy short term Rs.450 crores
Largest database on buyers 8 lakhs
Largest credit limit Rs.80 Crore
Largest claim paid Rs.120 crores

Quickest claim paid 2 days

Highest compensation-Iraq Rs 788 Crores[citation needed]
on 31.3.2012 ECGC has achieved a magical milestone of Rs.1000 Crores of premium
income

CODE OF ETHICS

Ethical codes are adopted by organizations to assist members in understanding the difference
between 'right' and 'wrong' and in applying that understanding to their decisions. An ethical code
generally implies documents at three levels:
1.codes of business ethics,
2.codes of conduct for employees, and
3.codes of professional practice.
A code of business ethics often focuses on social issues. It may set out general principles about
an organization's beliefs on matters such as mission, quality, privacy, or the environment. It may
delineate proper procedures to determine whether a violation of the code of ethics has occurred
and,
if so, what remedies should be imposed.

SOURCE:http://www.google.com/imgres?q=CODE+OF+ETHICS
This code shall be called the Code of Ethics and Business Conduct for ECGC employees
It shall be applicable to all employees of ECGC.
This Code supplements the various laws and regulations applicable to ECGC, as also its
internal policies, guidelines and CDA (Conduct, Discipline and Appeal) Rules,
compliance with which is mandatory and violations punishable as prescribed.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

SOURCE:http://www.google.com/imgres?q=corporate+social+responsibility
As per the MOU signed with Ministry of Commerce, Govt. of India for the year 2011-12,ECGC
has undertaken following three projects at M Ward, Mankhurd, Mumbai with the help of

National Corporate Social Responsibility Hub ( NCSRH) under administrative control of Tata
Institute of Social Science,
( TISS ) ,Chembur, Mumbai.
1

Empowerment of Women

Scholarship to Meritorious Students from underprivileged sections

Support to export oriented Skill Development Centre

The above projects will be completed by March2013.

CSR Date: 6/21/2012

Under the Corporate Social Responsibility (CSR) initiatives, ECGC had released an amount of
Rs.6.50,500 on 21.4.2011 for construction of first floor to Nirdhar Pratisthan , Mumbai, a
registered Charitable Trust under Mumbai Public Trust Act 1950 which provides permanent
home care service for mentally challenged persons.

CSR DATE: 4/24/2011

Under Corporate Social Responsibility (CSR) ECGC has donated school bus to Matru Seva
Sangh's, Nadanvan School, Nagpur (School for Mentally challenged children) on 01/04/2011.
For details, please

CSR DATE: 4/1/2011

Under the Corporate Social Responsibility (CSR) ECGC has donated an amount of Rs.28.45 lacs
on 28.03.2011 to Priya Darshani Jan Kalyan Samiti , Gyanpur, Dist. Bhadohi. An NGO
providing education to the children of Carpet weavers.

NEIA?( NATIONAL EXPORT INSURANCE ACCOUNT)

SOURCE:http://

ww

w.google.com/imgres?q=india+national+export+insurance+images
The National Export Insurance Account has been set up by the Government of India (GOI) and
operated by ECGC to provide adequate credit insurance cover to protect long and medium term
exporters against both, political and commercial risks of the overseas country and the buyer/bank
concerned. The NEIA trust also provides covers to banks for Buyers Credit transactions which
facilitates foreign buyer to pay for project exports from India.
Indian companies secure overseas projects against stiff international competition and needs
adequate credit insurance to enhance their competitiveness. Projects are required to be
undertaken, specifically due to the long term economic interest and political relationship of India
with importing country. Given Indias long term economic and political interests with the
concerned country, it is crucial that ability of Indian exporters undertaking such contracts is not

hampered by the inability to obtain credit insurance cover. With this view GOI has set up the
NEIA.
ECGC, a Govt. of India enterprise under the aegis of the Ministry of Commerce, apart from
insuring credit risks under short term exports also provides credit insurance cover to Medium and
Long term exporters. However, at times, its own limitations make it difficult for ECGC to cover
such risks on purely commercial considerations, taking into account the long repayment period,
the large value of the contracts and the difficult economic and political conditions of the country,
coupled with the fact that reinsurance cover is generally not available in such cases.

AWARDS & RECOGNITIONS

ECGC has been conferred the First Prize for the year 2010-11 for
excellent implementation of Rajbhasha by Ministry of Commerce.
Shri N.Shankar, CMD of ECGC has received the award from Shri
Jyotiraditya Scindia, Hon'ble State Minister of Commerce &
Industry in the Hindi Advisory Committee meeting held on 7
February 2012.

ECGC has been conferred Indira Gandhi Award for Rajbhasha (2nd
prize) for excellent implementation of Rajbhasha by Ministry of
Home affairs. Shri Arvind Mehta, CMD of ECGC has received the
award from Hon'ble Smt. Pratibha Patil, President of India on
14.09.2011 at a function held at Vigyan Bhawan, New Delhi.

RBI POLICIES FOR ECGC

SOURCE:http://www.google.co.in/imgres?q=RBI+POLICIES

RBI

authories

banks

to

write

off

GRs

on

settlemant

of

claim

by

ECGC
1. It has now been decided that Authorised Dealers shall, on an application received from the
exporter supported by a documentary evidence from the ECGC confirming that the claim in
respect of the outstanding bills has been settled by them, write off the relative export bills and
delete them from the XOS statement. Such write-off will not be restricted to the limit of 10 per
cent indicated in paragraph C.18(b) of the circular ibid.

2. It is clarified that the claims settled in rupees by ECGC should not be construed as export
realisation in foreign exchange and claim amount should not be allowed to be credited to
Exchange Earners Foreign Currency Account maintained in terms of Regulation 4 of FEMA
Notification No.FEMA 10/2000-RB dated May 3, 2000.

3. Authorised Dealers may bring the contents of this circular to the notice of their constituents
concerned.

4. The directions contained in this circular have been issued under Section 10(4) and Section
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).

CUSTOMER GRIEVANCE REDRESSAL POLICY

[Pursuant to Board Resolution No. 371/S1-01 dated 26th November 2010]

SOURCE : http://www.google.co.in/imgres?q=customer+grievance+redressal+of+ECGC

The Grievance redressal mechanism of an organization is the gauge to measure its efficiency and
effectiveness as it provides important feedback on the working of the Organization.
The main purpose of a Grievance Policy is to place an appropriate mechanism whereby the
Customer who believe(s) that he/ she has been wronged by any act of the
Company is afforded a fair opportunity to redress his/ her Grievance.
We have already forwarded the relevant IRDA Guidelines to all the BMs and H. O. Ds on 9th
instant.

Objectives
The objectives of the Grievance Redressal Policy are:
(a) To develop an organizational framework to promptly address and resolve customer
Grievances fairly and equitability;
(b) To provide enhanced level of customer satisfaction;
(c) To provide easy accessibility to the customer for an immediate Grievance redressal.
(d) To educate the customers about their responsibilities to access benefits due under the policies;
(e) To ensure that the customers are treated fairly at all times;
(f) To identify systemic flaws in the operational functions of the organization and products
suggesting corrective measures;
(g) To put in place a monitoring mechanism to oversee the functioning of the Grievance
Redressal Policy.

PROCEDURE FOR POLICY INSURANCE

There are application forms with carious Regional Offices of the ECGC which are to be
submitted to the nearest Regional Office with a policy fee which may be subject to
changes.

In case of shipment policies, the exporter undertakes to submit monthly returns in respect
of shipments made and the progress of the contractual terms.

In case of contract policy, the exporter undertakes to send a declaration monthly on the
contract entered into during the preceding month, in addition to shipment made over that
period

The ECGC should also get a monthly statement of all overdue payment so that it can take
steps to avoid possible losses.

The ECGC may charge additionally in case they require the bank reports on the foreign
buyer.

RISKS NOT COVERED UNDER POLICY

ECGC, however, does not cover risks of loss due to:
a. Commercial disputes, including quality disputes raised by the buyer unless the exporter
obtains a decree from a competent court of law in buyer's country in his favour.
b. Causes inherent in the nature of goods:
c. Buyer's failure to obtain import or exchange authorization from the appropriate authority:
d. Insolvency or default of any agent of the exporter or of the collecting banks:.
e. Loss or damage to goods which can be covered by general insurers:
f. Fluctuations in exchange rates (except under Exchange Fluctuation Risk over Schemes)and
g. Failure of the exporter to fulfill the term of contract or negligence on his part.

RECENT ACTIVITIES IN ECGC

Inauguration of split Bank and Exporter Branches at Tirupur/ Hyderabad on 2/7/2012

Inauguration of Faridabad Branch on3/8/2012
Revised Processing Fee structure for the customers from 01st July, 2012.
New Website of ECGC( www.ECGC.in ) launched: The new website of ECGC has
been launched on 21.6.2012 by Shri V S Das, Executive Director , Reserve Bank of India
in the presence of CMD and Senior Management of ECGC
ECGC pays claim of Rs.67.40 crs to Punjab National Bank
ECGC enters into an alliance with EKN
ECGC gets First Prize for the year 2010-2011 for excellent implementation of Rajbhasha
Recruitment of Probationary Executive Officers 2011-2012

AT PRESENT INSTITUTIONS TAKING CREDIT LOANS FROM

ECGC

Following are the sectors taking credit loans from ECGC.

Currently, public sector banks forms around
70% of the export financing while
foreign and private lenders form around 15%
each.
ECGC presently covers around 70% of total
short term export finance disbursed by banks in India.

Public sector banks used to take more credit loans as compare to private
sector banks.
Individual exporters also takes credit loans.

 In olden days the exporters was not knowing more about the ecgc at that
time the number of institutions taking credit loans was not more.

STRATEGIC PLANNING

is an organization's process of defining its strategy,

or direction, and making decisions on allocating its resources to pursue this strategy. In order
to determine the direction of the organization, it is necessary to understand its current position
and the possible avenues through which it can pursue a particular course of action

The key components of 'strategic planning' include an understanding of the

firm's vision & mission.

MISSIONS
It Defines the fundamental purpose of an organization or an enterprise,
succinctly describing why it exists and what it does to achieve its vision.
For example, the charity above might have a mission statement as
"providing jobs for the homeless and unemployed".
The mission of ECGC is to support the Indian Export Industry by providing
cost effective insurance and trade related services to meet the growing needs of Indian export
market by optimal utilization of available resources.

VISION
It outlines what the organization wants to be, or how it wants
the world in which it operates to be (an "idealised" view of the
world). It is a long-term view and concentrates on the future. It can
be emotive and is a source of inspiration. For example, a charity
working with the poor might have a vision statement which reads
"A World without Poverty."
The vision of Export Credit Guarantee Corporation of India
providing export credit insurance and trade related services.

Ltd. is to excel in

Many organizations are affiliated to ECGC and support its services. Export credit
guarantee corporation has signed the corporate agency agreements with many
banks out of which I have selected following banks:

FIELD VISIT OF BANK OF INDIA

BANK OF INDIA
Bank of India (BoI) is a state-owned commercial
bank with headquarters in Mumbai. Governmentowned since nationalization in 1969, It is India's 4th
largest PSU bank, after State Bank of India, Punjab
National Bank and Bank of Baroda. It has 4157
branches as on 21/04/2012, including 29 branches outside
India, and about 1679 ATMs. BoI is a founder member of
SWIFT (Society for Worldwide Inter Bank Financial
Telecommunications), which facilitates provision of costeffective financial processing and communication
services. The Bank completed its first one hundred years
of operations on 7 September 2006.
BOI ranked 1st among the nationalised banks as Indias most trusted service brand 2011 ET
Nielsen survey.

HISTORY
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from
Mumbai. The Bank was under private ownership and control till July 1969 when it was
nationalised along with 13 other banks.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees,
the Bank has made a rapid growth over the years and blossomed into a mighty institution with a
strong national presence and sizable international operations. In business volume, the Bank
occupies a premier position among the nationalised banks.

Bank of India is affiliated with ECGC it provides following credit on behalf of

ECGC
Pre-shipment Credit
Post shipment Credit

Following given is the interest rate chart of Bank Of India

Interest Rates (per

annum)
1

Pre-shipment Credit
(a) Upto 180 days

Not exceeding 200

basis points over
LIBOR/ EURO
LIBOR/ EURIBOR

(b) Beyond 180 days and

upto 360 days

Rate of initial period of

180 days prevailing at
the time of extension
plus 200 bps

Post-shipment Credit
(a) On demand bills for
Not exceeding 200
transit period (as specified basis points over
by FEDAI)
LIBOR/ EURO
LIBOR/ EURIBOR
(b) Usance bills (for total Not exceeding 200
period comprising usance basis points over
period of export bills,
LIBOR/ EURO
transit period as specified LIBOR/ EURIBOR
by FEDAI and grace
period as wherever
applicable)
Upto 6 months from the
date of shipment
(c)Export bills (demand
Rate for 2(b) above plus
or usance) realised after
200 basis points
due date but upto date of
crystallization

Following is the chart on rupee export credit other than specified sectors

Category of Export Credit

Rates

Rates

(1)

1. Pre-shipment Credit
a) i) Period upto 180 days
ii) Beyond 180 days and upto
270 days
b)Against incentives receivables
from Govt. covered by ECGC
Gtee upto 90 days
2. Post-shipment Credit
a) On Demand Bills for transit
period (as specified by FEDAI)
Usance Bills *
1

w.e.f.
01.07.10
Large
Corporat
e

w.e.f.
01.07.10
Mid
Corporate

9.25
9.25

9.50
9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

Base
Rate+
Credit
Risk
Spread
Base
Rate
+5.00%
Base

Base
Rate +
Credit
Risk
Spread
Base
Rate
+5.00%
Base

Upto 90 days

ii) Beyond 90 days upto 6

months from the date of
shipment
iii) Upto 365 days for exporters
under Gold Card Scheme
c) Against incentive receivable
from Govt. covered by ECGC
Gtee (upto 90 days)
d)Against undrawn balances
(upto 90 days)
e) Against retention money (for
supplies portion only) payable
within 1 year from the date of
shipment (upto 90 days)
3. Deferred Credit For the
period beyond 180 days

4. Export Credit Not

otherwise Specified (ECNOS)
a) Pre-shipment Credit b) Post
Shipment Credit

Rate
+5.00%

Rate
+5.00%

FIELD VISIT OF BANK OF BARODA

BANK OF BARODA

Bank of Baroda (BoB) is the highest profit-making public

sector undertaking (PSU) bank in India and the second
largest PSU bank in terms of number of total business in
India. It is the country's first largest public sector lender in
terms of annual profit. Bob is ranked 715 on Forbes Global
2000 list. BoB has total assets in excess of Rs. 3.58 lakh
crores, or Rs. 3,583 billion, a network of 4007 branches
(out of which 3914 branches are in India) and offices,
and over 2000 ATMs. It plans to open 400 new
branches in the coming year. It offers a wide range of
banking products and financial services to corporate
and retail customers through its delivery channels and through its specialized subsidiaries and
affiliates in the areas of investment banking, credit cards and asset management. Its total global
business was Rs. 6,722.48 billion as of 31 March 2012. Its headquarter is in Baroda and
corporate headquarter is in Bandra Kurla Complex Mumbai.

HISTORY
The Maharaja of Baroda, Sir Sayajirao Gaekwad III, Peshwa of the Maratha Empire, founded

the bank on 20 July 1908 in the princely state of Baroda, in Gujarat. Two years later, BoB
established its first branch in Ahmedabad. The bank grew domestically, until after World War II.
Then in 1953 it crossed the Indian Ocean to serve the communities of Indians in Kenya and
Indians in Uganda by establishing a branch each in Mombasa and Kampala. The next year it
opened a second branch in Kenya, in Nairobi, and in 1956 it opened a branch in Dar-es-Salaam.
Then in 1957 BoB took a giant step abroad by establishing a branch in London. London was the
center of the British Commonwealth and the most important international banking centre. 1959
saw BoB complete its first domestic acquisition when it took over Hind Bank.
The bank, along with 13 other major commercial banks of India, was nationalised on 19 July
1969, by the government of India.

INTERNATIONAL PRESENCE OF BOB

In its international expansion, the Bank of Baroda followed the Indian diaspora, especially that of
Gujaratis. The Bank has 93 branches/offices in 24 countries including 55 branches/offices of the
bank, 36 branches of its 8 subsidiaries and 2 representative offices in Thailand and Australia. The
Bank of Baroda has a joint venture in Zambia with 16 branches.
Among the Bank of Barodas overseas branches are ones in the worlds major financial centers
(e.g., New York, London, Dubai, Hong Kong, Brussels and Singapore), as well as a number in
other countries. The bank is engaged in retail banking via the branches of subsidiaries in
Botswana, Guyana, Kenya, Tanzania, and Uganda. The bank plans to upgrade its representative
office in Australia to a branch and set up a joint venture commercial bank in Malaysia. It has a
large presence in Mauritius with about nine branches spread out in the country.

Export Finance
Bank of Baroda, being Indias International bank is very active in Export promotion. With the
operating network of our own branches/offices in 25 countries and worldwide correspondent
relationships, our clients enjoy comforts in transacting international business. Besides the worldclass services, we also provide Export Finance to Exporters at concessive terms to facilitate their
competing in the global market.
Our Export Finance is made available at pre shipment and post shipment stage to exporters in
various types of credit:

Pre-Shipment Finance:

Packing Credit in Rupees.

Running Packing Credit in Rupees.

Packing Credit in Foreign Currency.

Letters of credit/Guarantees for procurement of materials for export.

Post-Shipment Finance:
Purchase of Export Documents under confirmed order.
Discounting of Export documents under L/C or confirmed order.
Negotiation of documents under L/C.
Post shipment demand Loans against Export Bills sent for collection.
Export Bills purchase / discounting in Foreign Currency.
Advance against export incentive receivables.

LITERATURE REVIEW

Over the years, it has come a long way in all its operational matrics too as a commercial
institution, understanding the market, changing requirements of Indian exporters and making its
services available to exporters across the country.

More importantly, as a non-life insurer, it also could successfully transform itself into a modern
insurance firm with niche base, meeting all regulatory compliances and requirements.

We strive to stay ourselves strong, aim to grow faster and improve our overall efficiency level,
says Mr Shankar, who has long years of experience in export credit business, earlier being
Executive Director of Exim Bank, one of Indias largest export promotion institutions.
Incidentally, the government has also been supportive and meeting its demands on time, he
points out.

ECGC always tries to understand the changing needs of various classes of exporters. It has, time
to time, developed various export credit risk insurance products to meet the requirements of
Indian exporters and commercial lenders, he points out.

ECGC has strong and well-defined systems and processes in place. Major strength of ECGC, he
says, lies in its committed and loyal workforce.

Officers are constantly trained on various aspects of business through brain-storming sessions.
Seminars, organized by it for its workforce, are mostly participative in nature for giving better
results, says Mr Shankar.

Sometimes they are also sent for programmes organized by out-side agencies, besides its own
programmes with an aim to help them gain better feedback and increase their knowledge of the
area they handle. Staff attrition is very low, which is major HR advantage for it.

At ECGC business review is a continuous process. ECGC, through its long experience and firsthand knowledge of the country risk, has developed an operational model with clear guidelines.

Recently, ECGC also has started working on its own credit rating models for overseas buyers of
Indian goods, which will also enable Indian exporters to understand the strength of the overseas
buyers.

It has prepared models of open cover and restricted cover lists. Under the open cover its
branches can decide on the exposure limit of buyers as per delegated powers. The exposure limit
is restricted in the case of restricted cover countries. This operational model, while protecting the
interest of the institution, sends a kind of message to exporters about the strength of their
overseas markets.

Many times, it is difficult to get information about overseas buyers. Sometimes, ECGC has only
their addresses. In many counties, it depends on outside agency for information.

For recovery it totally depends on overseas agents. Though ECGC is an institution dealing with
exporters interest and foreign clients of Indian exporters, it does not have a foreign office.

Now we are planning to open offices abroad, he says. Establishment of foreign offices will
enable it to go for more effective recovery process and understand the market better.

At the same time, it will also enlarge the panel of agencies who supply rating reports on clients.

In every sense, ECGC is a dynamic organization with a lean structure and high level of
manpower productivity.

With roughly Rs 1.75 crore per employee premium income and clean balance sheet, ECGC also
stands out to be a dynamic commercial organization that reaches its clients through own network
and also through alternate channels.

Now we have branches/offices in all big cities and SME clusters across the country says Mr
Shankar, who has many plans for the institutions long term growth.

Against IRDA prescribed solvency margin of 1.5 per cent, it maintains 10.5 per cent, another
sign of its strength as an insurer.

1
2

CONCLUSION
SUGGESTIONS

CONCLUSION

a Export Credit Guarantee Corporation of India (ECGC) is a government of

India enterprise administered by the Ministry of Commerce and Industry.
a Export Credit Guarantee Corporation of India was setup to enable smoother
functioning of the exporter in India by eliminating risks associated with payments
generating from other countries.
a Being essentially an export promotion organization, it functions under the
administrative control of the Ministry of Commerce & Industry, Department of
Commerce, Government of India.
a It is managed by a Board of Directors comprising representatives of the
Government, Reserve Bank of India, banking, insurance and exporting community.
a The insurance cover provided by Export Credit Guarantee Corporation of India
also helps the exporters in getting better access to credit facilities from financial
institutions.
a Export Credit Guarantee Corporation of India is the fifth largest credit insurance
company which deals with exports of any country.

a ECGC provides protection against non-payment by the importers. Because of this

insurance cover, financial institutions are better placed to lend and provide larger
credit to the exporters.
a The company also provides credit ratings and shares information on different
countries and the risks associated with doing business in those countries.
a ECGC recognizes that customers expectations/ requirements/ grievances can be
better appreciated through personal interaction with customers by ECGC officials.

a Structured customer meets will give the message to the customers that ECGC cares
for them and values their feedback/ suggestions for improvement in customer
service.
a ECGC is the fifth largest credit insurer of the world in terms of coverage of
national exports. The present paid-up capital of the company is Rs.800 crores and
authorized capital Rs.1000 crores.

SUGGESTIONS

ECGC shall take all efforts to abide by and enforce its citizen charter in all its
operations and shall respect and enforce policyholders rights as enshrined in the
relevant IRDA document.

 Complaints arising on account of lack of awareness among customers about ECGC

services may be avoided through customer interactions and customer awareness
programs.

QUESTIONNAIRE

1. When this bank was affiliated with ECGC?

2. What type of export credit is provides?
3. What is the interest rate on credit?

4. How the officers are trained regarding export finance?

5. Has the global economic slowdown negatively affected in your business?
6. What are your future plans for export promotion?
7. Is there any effect of sub-prime crisis on your performance?
8. How is your experience with ECGC?
9. Is there any foreign office of this bank for export promotion?
10. How is the growth of bank relating to export?
11. What are your future plans in India as well as overseas?
12. What is your experience in various other countries?
13. Are there any RBI guidelines which you have to follow?
14. How ECGC helps to economy of India?
15. How much is your contribution in ecgc export credit?

ARTICLE

SOURCE: http://www.google.com/imgres?q=construction+of+ecgc+office 1600&bih=805&tbm=isch&tbnid=U

BIBLIOGRAPHY

WEBLIOGRAPHY

BIBLIOGRAPHY

PRIMARY DATA
Bank of India: - Ambernath Branch
Bank of Baroda: - Badlapur Branch

SECONDARY DATA
3

INTERNATIONAL FINANCE
Author : V.A. Avadhani

ECONOSTER-Exporters credible lifeline

Author : N. Shankar

WEBLIOGRAPHY
http://www.ecgcindia.in/en/Pages/ECGCAPHome.aspx

http://en.wikipedia.org/wiki/Export_Credit_Guarantee_Corporation_of_India
http://www.scribd.com/doc/34200662/65/ROLE-OF-EXPORT-CREDITGUARANTEE-CORPORATION-ECGC
http://agriexchange.apeda.gov.in/Ready%20Reckoner/ECGC.aspx
http://www.thehindubusinessline.com/industry-and-economy/banking/article3487002.ece