ecgc group 5
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8/6/2019 Ecgc Group 5
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Export Credit Guarantee Corporation
Presented by Group - 5
Simon Choudhury Smriti Pattnaik
Somyakant Mohapatra
Subhasis Mohanty
Sunil Kumar Singh
Swaroop Ranjan BagharTapan Kumar Jena
Titiksha Mohanty
Vaishali Joshi
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What is ECGC?
� Export Credit Guarantee Corporation of India Limited, was established in the year1957 by the Government of India tostrengthen the export promotion drive by covering the risk of exporting on credit.
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What does ECGC do?
� Provides a range of credit risk insurance covers toexporters against loss in export of goods and
services� Offers guarantees to banks and financial
institutions to enable exporters to obtain betterfacilities from them
� Provides Overseas Investment Insurance toIndian companies investing in joint venturesabroad in the form of equity or loan
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How does ECGC help exporters?
� Offers insurance protection to exporters
against payment risks
� Provides guidance in export-related
activities
� Makes available information on differentcountries with its own credit ratings
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How does ECGC help exporters?
� Makes it easy to obtain export financefrom banks/financial institutions
� Assists exporters in recovering bad debts
� Provides information on credit-worthinessof overseas buyers
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Need for export credit insurance
� Risks even at the best of times
� W ar or civil war may block or delay payment
� Coup or an insurrection
� Balance of payment problems
� Insolvency or protracted default of buyers
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Payment Risk
EXPORT INSURANCEEXPORT INSURANCE
Goods Receivables
Exchange
Risk
Loss or
Damage
Marine
Insurance
Hedging by
Authorized
Dealers
CREDIT
INSURANCE
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RISK COVERED
COMMERCIAL RISKS± Insolvency of buyer/LC opening bank
± Protracted Default of buyer± Repudiation by buyer
POLITICAL RISKS± W ar/civil war/revolutions
± Import restrictions± Exchange transfer delay/embargo
± Any other cause attributable to importing country
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LC
RISKS
POLITICAL RISK
COUNTRYBUYER BANK
LC / NON ± LC
COMMERCIAL RISK
Risks Covered by ECGC
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� Standard Policy � Small Exporters policy � Specific Shipment Policy (short term)
� Export Turnover policy � Specific buyer wise policy � Consignment export policy � Global entity policy � Single buyer exposure policy � Multi buyer exposure policy
� Software project exports policy � IT enabled (single customer) policy � IT enabled (multi customer) policy � SME Policy � Customer specific policy (Tailor made)
Policies & Products
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Shipments (Comprehensive
Risks) Policy
� Whole Turnover principle- all exports coveredSelective options for LC/Associates/Consignments
90% cover� Advance Premium subject to Minimum premium of Rs.10,000/-�Policy Period - 2 years�Credit limit (Drawee wise) on all the buyersMonthly declarations with premium due�Premium rates schedule issued with Policy �No claim Bonus ± every year 5% subject to maximum of 50%
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Multi buyer exposure policy
� Cover on exposure as opposed to turnover and cover for more than 1 buyer� Discretion to choose buyers for cover with exporter and shall be acceptable
to ECGC� Processing Fee Rs.5000/- to accompany application
� List of buyers to be given with proposal and any addition to be advised� Minimum 10% of projected turnover will be fixed as Aggregate Loss Limit
(ALL) w hich will be the Maximum Liability � Exporter can opt for higher exposure than 10% of turnover� Cover for each buyer is 10% of ALL as Single Loss Limit (SLL)� Exporter to have access to ECGC website for checking defaulter buyer list.
� Coverage is 80% and lower cover available with proportionate reduction of premium. Single premium rate irrespective of country grading� Upfront premium payable before issue or in quarterly instalments� 5%No Claim Bonus reduction on renewal
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MSME POLICY
� Policy issued for small exporters with ExportTurnover not exceeding Rs10 Lak hs andregistered under MSME Act, 2006
� Cover available upto Rs10 lak hs with annualpremium of Rs 5,000 and a processing fee of Rs1,000
� Cover available will be 90%
� Maximum claim payable is Rs3 lak hs on any buyer
� No requirement of monthly declaration of shipments
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EXPORT FACTORINGSERVICES
� Factoring services involving finance, creditprotection, collection under one roof
� Finance against export receivables facilitatedthrough a bank
� Credit protection available after assessment of buyers
� Receivables financed without recourse� 80% prepayment against invoices and balance
after 90 days from due date less charges, if payment not received
� Details available at [email protected]
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Export Credit InsuranceCovers to Banks
� Covers for working capital granted by commercial banks to Exporters at Pre
shipment and Post shipment stages� Covers available on exporter wise, bank
branch wise and bank wise
� Losses due to protracted default /Insolvency of exporters covered
� Cover varies from 60% to 95% dependingon the type of cover
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Export Stimulus Package
� Additional cover of 5%, subject to maximum protectionof 95% available for all MSME exporters
� All exporters of Textiles ( including handicrafts and
handlooms), Gem & jewellery, leather, engineeringgoods, carpets, project goods, auto components andchemicals will also get the additional protection of 5%
� Additional cover through the National Export Insurance Account of the GOI
� Bank advances to MSME borrowers for exports will getan additional protection of 10% subject to maximumprotection of 85% under the Credit Insurance covers to
banks� Additional cover available for shipments /advances
made/ granted during the period 1st Jan 09 to 30th June09
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Notable achievements
� Largest Policy ± short term Rs.250 crores
� Largest database on buyers 3 lak hs
� Largest credit limit Rs.80 Crores
� Largest claim paid Rs.120 crores
� Quickest claim paid 2 days� Highest compensation-Iraq Rs 788 Crores