NEW DELHI: Union Minister of Commerce and Industry, Consumer Affairs, Food & Public Distribution and Textiles Piyush Goyal on Friday lauded the support and encouragement provided to exporters by ECGC Ltd.
Addressing the media in New Delhi today, the Minister emphasized the importance of transparency and simplification of procedures and said that all the procedures at ECGC Ltd. will be made entirely digital in the next few months.
The Minister said that the digitisation of processes at ECGC will enhance the convenience of exporters.
Goyal also said that a new grievance redressal mechanism at ECGC Ltd. will be established where a Live video-conference facility will be available daily for one hour on the website of ECGC Ltd.
“Last year ECGC Ltd. extended cover under Export Credit Insurance for banks (ECIB) scheme for the accounts with export credit working capital limits up to Rs 20 crore sanctioned by the banks (excluding Traders and GJD Exporters) with enhanced cover of 90 per cent. Four banks namely SBI, Central Bank of India (CBI), Bank of Maharashtra and Saraswat Bank have so far opted for the enhanced cover. The experience under the cover has been satisfactory in terms of low default ratio in the last year”, an official release of the I&B Ministry stated.
Goyal said that the extended coverage under the scheme has resulted in the easing of interest rates on the credit/loans obtained from the banks.
The Minister announced that the benefit of the enhanced cover will be extended to the accounts with limits up to Rs. 50 crore for the above four banks without any additional cost. It is expected that around 3000 exporter-borrower accounts will benefit from this.
As per the statement, for nine banks where a six-year claim to the premium ratio (CPR) is less than 70 per cent, cover for accounts with export credit working capital limits up to Rs 20 crore will be offered the enhanced cover of 90 per cent without any additional cost provided the banks are extending the export credit at an interest rate corresponding to the accounts rated ‘AA’ (or with equivalent rating).
Around 3000 exporter-borrower accounts will be supported by the enhanced cover under WT-ECIB for such banks. This product was the first of its kind in the export credit insurance industry all across the globe. The product facilitates the borrower accounts to be treated equivalent to ‘AA’ rated accounts with reduced cost of export credit to the exporters, the statement added.
“ECGC Ltd. will provide enhanced cover under the policy covers (providing protection against commercial and political risks on account of the overseas buyers) issued to the exporters in the policies available for sale in all the channels. 100 per cent cover will be provided for existing policyholders where the ‘No Claim Bonus (NCB)’ is 50 per cent and the policy proposal has been received directly from the exporters and not through insurance brokers. 5 per cent additional cover under the policies will be given where the proposal is received directly from the exporter and not through insurance brokers”, the statement read.
During FY 2022-23, ECGC Ltd. supported more than 16,000 exporters with an aggregate value of business covered to the tune of Rs 6.68 lakh crore, as stated by the official release.
CMD, ECGC. Senthilnathan said that the business-covered value is expected to increase to more than Rs.10 lakh crore in the current FY.
The release further stated that ECGC Ltd envisages providing claim and other insurance-related services to exporters and banks digitally after implementing the upgraded software system (ERP system), which is likely to be implemented within the next six months.
ECGC Ltd., a premier Export Credit Agency (ECA) of the Government of India, was set up in 1957 under the Companies Act to promote exports from India by providing export credit insurance services to exporters and banks.
It functions under the administrative control of the Ministry of Commerce and Industry. Over the years, the Company has designed different export credit risk insurance products to suit the requirements of Indian exporters to protect them against credit risk involved in exports.
The Company also provides insurance to commercial banks extending export working capital loans to exporters.
The products to banks are aimed at ensuring the availability of adequate and affordable working capital for exporters. The consequences to exporters help them in retaining the existing markets in addition to expanding exports to new and emerging markets by extending adequate credit to buyers. (ANI)