While all the insurance companies are busy dealing with life insurance and other smaller general insurance nuances, Export Credit Guarantee Corporation Of India covers trade. Read on for more!

Export Credit Guarantee Corporation of India

Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the Government of India to fortify the export promotion drive by covering the risk of exporting on credit. Back in July, 1957 it was known as Export Risks Insurance Corporation (ERIC) and was renamed Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and finally to Export Credit Guarantee of India in 1983. It is essentially an export promotion organization and functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce and Government of India. ECGC, in terms of coverage of national exports, is the fifth largest credit insurer of the world. The authorized capital of the company is Rs.1000 crores of which Rs.800 crores is currently paid-up. ECGC offers insurance protection to exporters against payment risks along with providing them with relevant guidance in export related activities and also enables them to gain export finance from banks and other financial institutions. By making information available on different countries and the credit worthiness of overseas buyers, ECGC assists exporters in recovering bad debts.

Credit Insurance Policies
Credit insurance provides protection in the event that the policy holder is rendered unable to pay an outstanding debt due to any incident that is covered in the terms of the policy. Under this genre are included the Shipments (Comprehensive Risks) Policy (also called the Standard Policy) suited for goods exported on short-term credit (i.e. credit not exceeding 180 days), the Small Exporter's Policy issued to exporters with an anticipated annual turnover of up to Rs.50 lakhs. Considering the requirements of large exporters, the Corporation has decided to introduce policies where premium is charged on the basis of the expected level of exposure. There is also a Consignment Policy that protects Indian Exporters from possible losses that incur from selling goods to ultimate buyers. Other such plans are:
Guarantees To Banks
A guarantee from ECGC ensures that the liabilities of a debtor are met even when s/he fails to settle it himself/herself. The duration for the period of cover is twelve months and all packing credit advances as per the RBI (Reserve Bank of India) guidelines are eligible.
Special Schemes
A letter from ECGC guarantees that a buyer's payment to a seller is received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank is required to cover the full or remaining amount of the purchase. 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. The confirming bank suffers a loss if the foreign bank fails to reimburse it with the amount paid to the exporter. For example, 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%.
Contact Address
Express Towers, 10th Floor,
Nariman Point, P. O. B. No. 11677,
Mumbai - 400 021
Phone - 022-66590500-510
Website: www.ecgc.in