ecgc policies, guarantees and claim procedures

8/13/2019 ECGC Policies, Guarantees and Claim Procedures

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Presentation on ECGCPolicies and

Guarantees andClaim Procedures

P S Murali


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P S Murali

ECGC, an overview

Established in 19! CPSE under " Ministry o#

Commerce $ %ndustry &oard Constituents " G'%, (&%, )%s,

%ndustry Paid up Capital as on *1+*+-1*.

(s 1 Crores /et 0orth as on *1+*+-1* . (s

-,*! Crores /o+ o# Employees as on

*1+*+-1*. 23 %S' 914-2 certi#ied i555 rated by %C(5, an %ndian


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(ole o# ECGC

E7tends credit insurancecovers to e7porters againstcredit losses in e7port o#goods and services

%ssues credit insurancecovers to ban6s $ #inancialinstitutions to enable themto e7tend better #inancial

#acilities to e7porters Provides medium and long4

term covers #or Pro8ectE7porters De#erred Credits

Provides 'verseas


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&usinessPro#ileCovers

to

ShortTerm(ST)

Surety

Medium and LongTerm (M& LT)

OverseasInvestment

Insurance Policy

1. Declarationased

Policies!."#$osureased

Policies%.S$eciicShi$ments

Policy'.onsignment

"#$orts Policies

Short Term and Medium &

Long Term

P PS

*und +ased,on und

ased

S$ecial schemes1. Lines o credit!. uyers credit

"#$orters an-s*Is

reditInsurance1. S$eciic

ontractsPolicies

!.S$eciicShi$ments

Policies%. S$eciicServices

Policies


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?ypes o# (is6s covered(is6s

Covered

ommercial

is-

Political is-

1. Insolvency!. ProtractedDeault%. e$udiation'. Insolvency oL

O$ening an-

Insolvency o the "#$orter

"#$orters an-s*Is

1. /ar. ivil /ar"tc!. Im$ort

estrictions%. Transer Delay' .Diversion o0oyage. "#$ro$riation

Insolvency o the "#$orter

Protracted Deault o the"#$orter


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(is6 Evaluation 4 &uyer

&uyer 5ssessment

)i7ing a limit on the buyer .'pinion o# the (eporting 5gency

Commodity E7ported)inancials o# the &uyer %nsurer@s $ E7porter@s

e7perienceCredit (is6 %nsurer acceptsliability o# the buyer based on

the assessment o# the various#actors and the credit


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2

To encourageSmall

"#$orters

*or Large

"#$orters

To coverS$eciic

Transactions

To over allTransactions

To coverS$eciicuyer

To coverServices

To coveronsignment

e#$orts

To $rotect

+oth microe#$orters

Small

E7portersPolicy

Shipmentcomprehensive

ris6s Policy

ServicesPolicy

3E7ports;speci#ic buyer>

3&uyer

MSMEpolicy

3E7port?urnoverPolicy

Consignment E7ports

GlobalEntity or

Stoc6holding agent

Policy

Speci#ic

Shipments Policy

STST

PoliciesPolicies

Credit Insurance cover (Short

term)

Multibuyer

e7posurePolicy


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Commercial disputes including


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Delay in reporting de#ault

/o 5dvance premium available

Prior approval not ta6en #or

e7tension

Ma6ing #urther shipments whenearlier bills are already overdue

Common =apses 4E7porter


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EC%& 4 )eatures %ssued to ban6s $ )%s, either individually

or on whole turnover basis, to cover theirpre and post shipment advances toe7porters against the ris6 o# insolvency orprotracted de#ault+

Ma7imum =iability, Discretionary =imit,

Set =imit $ E7clusions

Protection varies #rom A to 9A

Bnderwriting o# ris6s based on &an6@s

credit appraisal note, #inancials, ECGCe7perience etc+

Special Conditions"GD Sector, %ron 'reSector, 5ll Sectors

Claim payment with recourse


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Limit

,otiication4$$roval

Declaration andPremium

"#tensions

e$ort o Deault

e$ayment

,ursing

laim

e5ection Payment

S4L

ecovery6rite o

Sanction"nhanc

ementene6al

*ull ecovery

Delisting

I&succeeds

egularised

Listing

Issueene6al

I ails

Delay inre$ayment

EC%& 4 Process #low

I not regularised


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EC%& 4 &ene#its

)low o# ade


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%nterventions already in placeGD Sector

Standard accounts up to (s -crores, under each cover ;PC andPS>, covered by way o#noti#ication+

&eyond (s - crores, approval#rom ECGC is mandatory+

Special conditions .4

;1> Credit score should be e &uyer Speci#ic

5pproval;&S5=> veri#ication


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%nterventions already in placeGD Sector

;*> Credit in#ormation onoverseas buyers should besatis#actory

;> 'verdue, i# any, should notbe more than A o# limit outstanding, whichever, is lowerand should not be more than *

days #rom the original due date

;> %ncremental limits #reshlimits sanctioned on or a#ter

1+!+-1-, the percentage o#cover is A+


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(ecent %nterventions4implemented

GD Sector)urther conditions . 4ECGC@s CMDs communication toCMDs o# all &an6s holding 0?covers dated +-+-1*+

a> 5ggregate cover to large EC%&

accounts would presently be

limited to ECGC@s prudential limit

o# (s 1,-19 crores per e7porter

and to (s+1,2-2 crores per

e7porter group, being A !A

o# the /et 0orth o# the


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GD Sectorb> Covers would be available oncredit limits sanctioned based onpro8ection o# turnover up to1-A o# the previous year@s

turnover and up to a ma7imumo# A o# the anticipated annuale7port turnover o# the e7porter+

c> 5ll other e7isting conditions,such as A cover #or

incremental e7posure,re uirement o# s eci#ic


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GD Sectord> 5dhoc Standy limits beyondthe MP&) would not be approvedin the normal course+

ECGC would consider only in

e7ceptional cases+e> &an6s to sanction andintimate to ECGC, speci#ic Pre4shipment limits " not to be

combined with CC limits ; even i#combined in their sanction,&an6s to intimate ECGC o# thee7act PC limits " &an6s to ta6eprior approval o# ECGC i# the PC


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GD Sector#> )or incremental e7posures,additional collateral security o#-A to be ta6en, to start with

%t is clari#ied that the term@incremental e7posures@@ re#ersto the additional e7posure over

and above the previous limitsalready approved by ECGC, #orthe e7porter group+


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5ll Sectors

a> &an6s to obtain satis#actory,

recent credit reports ;not morethan one year old> on overseasbuyers #rom reputed Credit%n#ormation 5gencies ;C%5>, prior to

e7tending credit against billsdrawn on overseas buyers, underPost Shipment+

&an6s, i# they so desire, mayobtain the list o# C%5s availablewith ECGC+ Satis#actory@ creditreport means a C( to be

Satis#actory by your &an6, based@


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5ll Sectorsb> &an6s to veri#y &uyer Speci#ic

5pproval =ist ;&S5=> maintainedby ECGC, prior to grantingadvances under Post4Shipmentby re#erring to the ECGCwebsite " &an6s already haveelectronic access to ECGC@s&S5=+

c> &an6s to obtain the approvalo# the Corporation, irrespectiveo# the 5sset Classi#ication o# theaccount, where per buyer limit

e7posure e7ceeds (s 1 crores

i


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5ll Sectorsd> &an6s to obtain prior approval

o# the Corporation where theindividual e7porter limit e7porter group limit ;PC and PSlimit> is e &an6s to obtain prior approvalo# the Corporation, irrespective

o# the 5sset Classi#ication,where the e7porter hasdiversi#ied into unrelatedbusiness activities, wherein the

share o# the unrelated business

i


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5ll Sectors?he term @unrelated businessactivities@@ is clari#ied as a shi#t#rom the e7porter@s normal traditional business activity ; in

terms o# commodities>, asde#ined by the %?C ;S> " %ndian?rade Classi#ication based onarmonished System, which is#ollowed by %ndian Customes and5llied 5gencies and adopted #orall %mport E7port 'perations+

Merchant E7porters would be

ecen n erven ons


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ecen n erven onsimplemented

GD Sector

#>&an6s to sanction andintimate to ECGC, speci#ic Pre4shipment limits " not to becombined with CC limits ;even

i# combined in their sanction,&an6s to intimate ECGC o# thee7act PC limits " &an6s to ta6eprior approval o# ECGC i# the

PC component ;out o# CCe7ceeds (s - crs or -A o#the combined limit

EC%&


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EC%&Common =apses 'bserved

/on reporting o# sanctioned limitand /on payment o# premium atthe relevant point o# time+

/ot obtaining Speci#ic 5pprovalin S5= cases+

/ot obtaining approval #or F/ew5ccounts beyond theDiscretionary =imit+

Delay in #iling (eport o# De#ault+

Continue granting advances

EC%& C =


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EC%& 4Common =apses'bserved Deterioration in 5sset

Classi#ication, not in#ormed to

ECGC+ ;(estructuring>

BtiliHation o# the Pac6ing Creditadvances to ad8ust other dues

o# the e7porter+

5dvances granted a#ter /P5date, without prior approval

#rom ECGC+ Sale Change in the Collateral

securities, without approval#rom ECGC ;(eduction incollateral coverage>+

EC%& C =


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EC%&4Common =apses'bserved &ill proceeds not ad8ustedto Pac6ing Credit account+

Continuing to grant advancesagainst bills drawn on de#aultedbuyers, e7cept where the

proceeds have not gone toad8ust the e7isting Pac6ingCredit dues+

PC advances have gone to

ad8ust the payment o# Devolved=C+

Conversion o# overdue into

0C?=, without the prior


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?han6 you

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www+ecgc+in

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