EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
ROLE OF
ECGC
In The Service Of Export
Industry
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
ECGC - Background
• Board headed by Chairman and
Managing director with 13 Directors
• Head Office at Mumbai
• Regional Offices at Mumbai, New Delhi,
Kolkatta, Chennai and Bangalore
• Authorised capital Rs.1000 crs
• Branch Offices at 50 export centers in
India
• Registered with IRDA
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Role of ECGC as an Export
Credit Insurer
Providing credit insurance covers to exporters
against loss in export of goods & services
Providing export credit guarantees to banks &
FI’s to enable exporters obtain better facilities from
them
Providing Overseas Investment Insurance to
Exporters - Indian Entrepreneurs in Overseas
Ventures (Equity/Loans)
DCI to Banks & Exporters
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Types of Export Credit Risks
Com-
Political
mercial
Risk
Risk
Export
Credit
Economic Risk Exchange
Risk Risk
Transfer
Risk
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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 )
COUNTRY BUYER BANK
LC / NON – LC LC
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Commercial Risk
Insolvency of
the buyer
Non
acceptance
Protracted or non
default of payment
the buyer
Insolvency of Default of the LC
the LC opening opening bank
bank
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Political Risk
War, Civil
war, Internal
disturbances
exchange
transfer
blockages
Nationalization
/Expropriation
Import ban,
restrictions,
cancellation of
import licence,
etc.
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Risks Not Covered
×Risks of loss due to commercial or quality
disputes
×Insolvency or default of any agent of the exporter
or of the collecting bank
×Loss or damage to the goods which can be
covered by general insurers
×Exchange Rate Fluctuation
×Failure of the exporter to fulfil the terms of the
contract or negligence on his part
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Seven Fold Country Classification
Risk Category ECGC Classification
Insignificant A1 (1/7)
Low A2 (2/7)
Moderately Low B1 (3/7)
Moderate B2 (4/7)
Moderately High C1 (5/7)
High C2 (6/7)
Very High D (7/7)
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Types of Cover
• While underwriting the country risk, ECGC
places the country either in
Open Cover OR Restricted Cover
• The basis for deciding on the type of cover and
terms of cover is a host of economic and
political factors
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Open Cover Countries
• Cover with No Restrictions
• Cover is offered usually on normal
terms and conditions i.e. 90% cover, 4
months waiting period for
ascertainment of loss and settlement of
claims, etc.
• Currently ECGC places 195 countries
under Open Cover
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Restricted Cover Countries
• Usually those countries where the
political and/or economic conditions
are relatively deteriorating or have
deteriorated and likelihood of
payment delays or non-payment are
imminent or have occurred
• Permits selection of risks ECGC
wishes to underwrite
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Restricted Cover Countries
• Category 2: Countries where Specific
Approval will be given on case to case basis
on merits
– Valid for six months
– Normal waiting Period of 4 months
– Only 8 countries under this category:
Afghanistan, Palestine, Cuba, East Timor,
Iraq, North Korea, Somalia, Lebanon.
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Shipment
Small Exporters Comprehensive
Policy risk policy Policy
To encourage To Cover all
Small Exporters Transactions
Export •Export
Maturity Turnover
To protect both
Factoring Bank & For Large • Multi buyer
Exporter Exporters exposure
SHORT TERM • Tailor-
COVERS made policy
To cover To cover
Consignment Specific
exports Transactions
Consignment
Exports To cover Specific
Policy Services and To cover Shipments
software exports Specific Buyer Policy
Services Policy
Software project policy •Exports (specific
IT enabled services buyer)
policy •Buyer Exposure
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
Policy basics
• Ascertain risks covered and risks not covered
• Take the policy required for the purpose
• Ensure limit on the buyer to cover
• Remit premium in time
• Monitor payments and Report overdue in
time
• Initiate timely recovery action
• File claim early
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
LET US DO THINGS BETTER
TOGETHER
in
EXPORT SECTOR
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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED
THANK YOU
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