ECGC (Export Credit Guarantee Corporation of India)
The Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly owned by the Government of India and based in Mumbai, Maharashtra. The organisation was inaugurated on July 30, 1957 as the Export Risk Insurance Corporation and got its present name in 1983.
ECGC is the seventh largest credit insurer in the world in terms of coverage of national exports and the fifth largest credit insurance company, which deals with exports of any country. The present authorised capital of the company is Rs. 5000 crore and the paid up capital of the company is Rs. 1200 crore. The company provides export credit insurance support to Indian exporters, and is controlled by the Ministry of Commerce, Government of India.
Export Credit Guarantee Corporation of India provides credit insurance covers to exporters against loss in export of goods and services. It also provides export credit guarantees to banks & FI’s to enable exporters obtain better facilities from them. In addition, it provides Overseas Investment Insurance to Exporters – Indian Entrepreneurs in Overseas Ventures (Equity/Loans).
The insurance cover provided by Export Credit Guarantee Corporation of India helps the exporters in getting better access to credit facilities from financial institutions. Shri N Shankar is the Chairman cum Managing Director of Export Credit Guarantee Corporation of India.
Export Credit Insurance for Exporter
- Turnover Based
- Shipments Comprehensive Risks Policy (SCR): A standard or whole turnover policy that is available to exporters with annual export turnover of over Rs. 5 crore. The policy offers a 90% cover for a period of 12 months. The minimum premium is of Rs. 10,000
- Small Exporters Policy (SEP): Similar to the standard policy, the SEP provides an improved cover for exporters whose expected export turnover for the one year period is less than Rs. 5 crore. The maximum liability under the policy is for Rs. 2 crore
- Specific Shipment Policy (SSP): The policy is meant for exporters who do not have any cover under the standard or whole turnover policy or by an exporter who has a standard policy but shipments are not included in the cover. The policy provides up to 80% cover
- Services Policy (SRC): The policy protects Indian companies who have signed up with foreign parties for providing them with professional or technical services and are at risk from non-payment of amounts due to them. ECGC offers specific services contract and whole-turnover services policies for both comprehensive and political risks
- Export Turnover Policy (ETP): The policy is meant for large exporters who contribute more than Rs. 10 lakh in premium on an annual basis. The policy is valid for 12 months and provides 90% cover
- Exports (Specific Buyers) Policy (BWP): The policy covers shipments made to a particular buyer or a Letter of Credit (LC) opening bank for a set of buyers. The period of the policy is of 12 months and the cover provided is 80%
- Consignment Exports Policy (Stockholding Agent) (CSA): The cover is meant for exporters who sell to an agent on a consignment basis. The policy is valid for a period of 12 months. The cover given is 90% for the standard policy holders and 80% for others
- Exposure Based
- Buyer Exposure Policy (SBEP): The policy offers a simplified procedure and rationalised premium for exporters sending large shipments to a single buyer. The cover insures against commercial and political risks and gives the option to exclude LC shipments. The policy is valid for 12 months and provides a 90% cover for standard policyholders and 80% for others
- IT-Enabled Services Policy-Single Customer (SITES): A single customer policy, it is given to insure against loss for services rendered under a defined billing period. The policy is valid for 12 months and provides up to 80% cover
- Small And Medium Enterprise (SME): Meant especially for the SME sector, the policy guards against commercial and political risks. It is provided for a period of 12 months and offers a cover of 90%
- Software Project Policy (SPP): The cover is meant for exporters of software and related services provided on both on-site and off-site basis. The policy period is subject to the contract period and the cover given is 80%
- Medium & Long Term (ECIE-MLT)
- Construction Works Policy (CWP): The policy is meant for Indian contractors who work on civil construction contracts abroad. The loss cover is for 80%
- Specific Policy for Supply Contract: A standard whole turnover policy that provides a continuing cover for regular flow of an exporter’s shipments, and within which the period of credit is less than 180 days
- Specific Shipment Policy (SSP): The policy is meant for exporters who have secured contracts for the supply of capital goods such as machinery or other capital equipment on a deferred payment basis. The loss coverage is limited to 90%
- Specific Services Policy (SRC): Thepolicy insures against any loss arising from specific contracts wherein Indian businesses have provided technical or professional services to foreign principals. The cover limit is 90%
- Specific Services Contract Policy (SCP): Thepolicy guards against loss from specific services that are rendered to a foreign party abroad by an Indian company under a contract for provision of specific services
- Letter of Credit Confirmation Cover: The cover is meant for Indian banks which confirm foreign letters of credit and subjects themselves to risks from non-reimbursement of the amount they have paid to the exporters by the foreign banks
- Pre-Shipment (PC)
- Individual Packing Credit (INPC): The insurance is available to banks that have given packing credit advances. The cover is valid for 12 months
- Whole Turnover Packing Credit (WTPC): The cover is given to banks or financial institutions for all their accounts to which they offer packing credit advances. The cover is provided for 12 months
- Branch Wise Packing Credit (BIPC): The insurance is available to bank branches that have given packing credit advances and is valid for 12 months
- Post-Shipment (PC)
- Individual Post Shipment (INPS):The ECGC offers a host of individual post-shipment covers including:
- ECIB_INPS (With Exclusion)
- ECIB_INPS (Without Any Exclusion)
- ECIB_INPS (Not Holding Standard Policy)
- ECIB_INPS (Excluding Cover for Shipments Made Against LC)
- Whole Turnover Post Shipment (WTPS): The policy is available for all post-shipment advances given to the exporters for purchase, discount or negotiation of export documents or against export bills sent on collection basis
- Export Finance (EF): The policy covers against risks from advances against incentives such as drawback of duties, cash assistance, and other such amounts receivable at the post shipment stage
- Cover against Bank Guarantee
- Export Credit Insurance for Banks - Surety Cover (ECIB-SC): The policy protects banks against any loss from providing surety for their exporter clients
- ECIB - Surety Cover (ECIB-SC): Includes Advance Payment (ECIB-SC-AP) policy and Advance Payment-cum-Performance (ECIB-SC-APP) policy, and are given to banks who have provided working capital limits for the exporter to export goods. The exporters should have acceptable credit rating score of 50% or above
- Medium & Long Term (ECIB-MLT)
- Individual Packing Credit (INPC): The cover can be taken by banks that offer advances or credit facilities to exporters for manufacturing, purchasing, processing and / or packing of goods. The policy is available for 12 months and offers up to 75% cover
- Individual Post Shipment (INPS): The policy is available for banks or financial institutions that are authorised to deal in foreign exchange and provide post-shipment finance to exporters. The 12 months policy has to be taken for each project and offers a cover of up to 75%
- Cover Against Bank Guarantee / Export Performance (EP): The insurance is meant to protect banks that guarantee the bonds furnished by exporters during various stages of bidding, for advance payment or for due performance
- Export Finance (Overseas Lending) (EF-OL): The policy helps banks to guard against risks from providing foreign currency loans. The premium for 75% cover is 0.9% per annum while for 90% cover it is 1.08% per annum
- Cash Flow Deficit Financing (ECIB-CFDF): The policy helps banks to protect against liabilities arising from extending loans to contractors to tide over cash flow deficits. The policy is valid for 12 months and provides up to 75% cover
- Export Factoring Facility: The facility is offered by ECGC to the Micro, Small and Medium sector, it comprises of a package of various financial products such as working capital finance, credit risk protection, sales ledger maintenance and collection of receivables from overseas buyers. The enterprises must have a minimum of 3 years experience in exports and should have a good track record
- Buyer’s Credit Cover: The insurance provides protection against defaults of credit given to foreign buyers for importing machinery and equipment from India. The policy offers 90% loss coverage
- Lines of Credit Cover: The policy provides protection against any default of a line of credit given to a foreign buyer for importing machinery and equipment from India. The policy offers 90% loss coverage
- Overseas Investment Insurance: The policy insures the investments made or equity capital expended to set up or expand overseas projects.
- Customer Specific Covers: These policies are provided on a selective basis to large exporters if their insurance needs are not met under any of the insurance schemes offered by the ECGC. In most cases, these policies are issued without changing the basic risk cover profile of the export transaction.
- National Export Insurance Account (NEIA): Introduced to help the ECGC provide insurance for high-value exports or projects that are not viable to be insured under the standard insurance schemes but need to be covered from the point of view of national interest.
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ECGC (Export Credit Guarantee Corporation of India) Reviews
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