Mr. Bill Gates acknowledges Hester for developing a Newcastle Disease Vaccine - Sonalika Tractors aims to expand in Europe and 5 global markets eyes 20% growth - Schneider Electric Announces EcoXpert™ Master Level Partners in Critical Power - NAREDCO TO LAUNCH ITS FIRST PROPERTY EXHIBITION IN MUMBAI - BSE’s India INX gets SEBI nod for listing framework of debt securities - Prime Minister inaugurates Dr. Ambedkar International Centre - Defending champ Rashpal confident of retaining Crown - ICAI International Conference 2017 Concludes Today - adidas partners with Lifestyle International Pvt. Ltd. adidas women’s apparel will now also be available at 16 Lifestyle stores across India - PUBLICATION OF MARATHI NOVEL "HIS DAY" FOR HIZDE [Trans Gender] RELEASED AT A BOOK LAUNCH AMIDST EUNUNCHS - NSE compiles ‘Regulation wise Compilation of SAT Orders’ Senior SEBI officials release an e-book in 5 volumes on SAT orders - Ruchi Soya to scale up Soybean crushing business post favorable government policies - Cloudnine Group of Hospitals Inaugurates First ever hospital in New Mumbai dedicated to mothers & babies - STERLING HOLIDAYS REDEFINING THE INDIAN HOLIDAY LANDSCAPE - Astron Paper and Board Mill Limited’s IPO opens on December 15, 2017, with Price Band of Rs. 45 to Rs. 50 per Equity Share of Face Value of Rs. 10 each - SumTotal Advances as a Leader in Nucleus Research’s Talent Management Technology Value Matrix for a Third Consecutive Year - PRICING OF USD 500 MILLION 3.835% FIXED RATE SENIOR UNSECURED DOLLAR GREEN BOND OF 10 YEAR TENOR BY INDIAN RAILWAY FINANCE CORPORATION LIMITED - Nation pays tribute to Dr Babasaheb R. Ambedkar on his death anniversary along with the Prime Minister and Celebrity - 2nd Global Textile Technology & Engineering Show 1st – 3rd February 2019 - White Hill Music releases brand new song ‘Nain’ from the album ‘Solo’ - Camlin brings Iconic `Flora Classic’ Pencils back - The 5th Edition of China Homelife / Machinex India 2017 inaugurated at BEC, Mumbai - Emotion with devotion needed for Khadi’s growth, says Minister Giriraj Singh - Union Bank of India ties up with RXIL (Receivable Exchange of India Ltd) as a TReDS (Trade Receivable Discounting System) Partner - CJP Uploads Online Petition Intervening For Peace in Ayodhya - The Governor of Maharashtra CH Vidyasagar Rao has expressed grief on the demise of veteran actor Shashi Kapoor - Actress-Model Daljeet Kaurr Mrs Universe 2016 introduced models from 26 cities for Mr, Miss and Mrs IAWA 2017 at Off the Grid Lounge,Mumbai - Music Launch of ‘Dr. Tatya Lahane | Angaar… Power Is Within’ A Mesmerizing Affair - Noor (Non-Interest Bearing Resident Accounts) Personal Accounts Launched By Federal Bank on Milad-E-Sherif - Latest Patented Innovation from Kaspersky Lab Helps Businesses Tackle Stealth Remote Control - VODAFONE INTRODUCES NOIDA’S FIRST FREE WI-FI ENABLED BUS SHELTER - Intersolar India, the Three Day Flagship Solar Industry Conference and Exhibition Opens on December 5 in Mumbai - Mercedes-Benz strengthens its after-sales footprint in south India, inaugurates the first luxury car workshop in Salem - Ravi Dube, Ahsaan Qureshi,Shharad Malhotra,Meghna Naidu, Iqbal Khan, Ishrat Ali, Daljit Kaur & Yogesh Lakhani came for 4th Dashnik Mumbai Press Media Award at Iskcon,Mumbai. - INAUGURATION OF AADHAR ENROLMENT-CUM-UPDATION CENTRE AT MUMBAI GPO - Hema Malini launches “ONE FOR ALL , ALL FOR ONE”, a Tribute and salute to Indian Army - Bollywood Actor and MP Hema Malini during announcement the Synergy, an Indo Georgian Dance fusion in Mumbai - Glamour Rendezvous Diagold cuts the ribbon with Shilpa Shetty - Moneycontrol hosts a special ground event ‘India’s Road Ahead’ - GUJARAT ELECTIONS STARTS TODAY - Yogacharya Amit Dev transcends Mahaprabhu Ji’s Yoga to Russia

ECGC : Reduction in insurance cost for exporters

PHOTO BY GPN NETWORK.PHOTO BY GPN NETWORK.
PHOTO BY GPN NETWORK.

PHOTO BY GPN NETWORK.

Mumbai, 31 May, 2017 (GPN) : In its 60th year of operation, ECGC took a customer friendly step by reducing the premium rate by an average 17% for its whole turnover policy covers. The average rate of premium under short term exporters’ business has come down from 28.19 paise per Rs.100 during Financial Year (FY) 2015-16 to 25.46 paise per Rs.100 during FY 2016-17, thus reducing the transaction cost for making exports competitive.

ECGC is a premier Export Credit Agency (ECA) of Government of India providing credit insurance to exporters against non-payment risks by the overseas buyers due to Commercial and Political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers.ECGC has an Authorized Capital of Rs.5000 crore and a Paid-up-Capital of Rs.1450 crore as on 31 March, 2017. Its net worth as on 31 March, 2017 stands at Rs.3619 crore.

During the FY 2016-17, it has initiated a number of customer friendly export promotion initiatives to boost India’s exports.

Apart from reduction in premium rates under whole turnover policies, it has also taken steps to make Export Factoring Scheme, cheaper for MSMEs. To give fillip to the Medium & Long Term (MLT) export sector, the Company has introduced covers to the subsidiary  MLT exporters in India.  In order to speed-up claim settlement, ECGC has set up Regional Claim Processing Centers (RCPC) at all the five Regional Offices, located in major metro cities. As an incentive to large exporters, the Volume Discount has been rationalized to extend the benefits to more and more exporters.

Addressing a media meet to highlight business performance for the FY 2016-17, Mrs. Geetha Muralidhar, Chairman-cum-Managing Director of ECGC mentioned that the value of exports covered under exporters’ business as well as the number of policies in force had shown a redeeming trend with a growth of 4%. The value of business covered during FY 2016-17 stood at over Rs.1,41,000 crore and the number of policies in force at over 12,000 as compared to Rs.1,35,000 crore and 11,525 respectively in the FY 2015-16.

Under the Export Credit Insurance Covers issued to Banks (ECIB), the export advance outstanding of the banks and covered by ECGC as on March 31, 2017 stood at over Rs.1,17,000 crore covering over 23,500 exporter accounts.

The share of Banks covered by ECGC in export credit disbursement continues to be substantial though declining. All the Government owned banks and 14 private sector banks are under the cover of ECGC.

The overall business which includes the covers issued to the exporters, banks and MLT sector, covered during FY 2016-17 stood at over Rs.2,65,000 crore.

In the wake of continued global recession and uncertainties, ECGC also continued to experience high claim pay out of Rs.886 crore during FY 2016-17  after the record claim pay out in the last FY 2015-16. ECGC paid out 578 claims amounting to Rs.207 crore to exporters under direct policies and 200 claims amounting to Rs.679 crore to the lending banks under Export Credit Insurance Covers issued to Banks during FY 2016-17.  ECGC maintained  high solvency ratio of 8.88 as on 31 March, 2017 against the regulator’s norm of 1.5.  The claims paid are spread  across various sectors such as agricultural products, engineering goods, gems & jewellery, readymade garments, basic chemicals & Pharmaceuticals, etc.

As regards Policy business, the Corporation presently underwrites risk on 237 countries of the world and maintains records of about 1,25,000 active buyers all over the world wherein the overall exposure underwritten is to the tune of Rs.1,40,000 crore. During the FY 2016-17, the Company added around 18,000 new buyers to its database. The data on buyers is used for underwriting commercial risks on the buyers.

ECGC also covers risks of project exporters and banks involved in the medium and long term exports. As on 31 March, 2017, around 85 policy covers and about 142 covers to banks were in force. Major projects supported by ECGC, are being executed in Oman, Kenya, Vietnam, Afghanistan and Nepal.

On account of Government of India, ECGC operates National Export Insurance Account (NEIA) Trust to promote project exports from India that are of strategic and national importance which are beyond underwriting capacity of the Company. As of 31.03.2017, there were 122 covers in force related to 76 projects under NEIA.  The value of exports enabled by ECGC is over Rs.26,000 crore and through the Buyer Credit covers it is around Rs.8500 crore.

Dwelling on the financial results of the Corporation for 2016 -17, Mrs. Geetha Muralidhar mentioned that the Corporation’s financial results during the year were highly satisfactory with Gross Profit of over Rs.400 crore. The Company has proposed a dividend of Rs. 72.50 crore to the Government of India for the FY 2016-17.

In the International arena, ECGC signed a bilateral agreement with Iranian counterpart, EGFI on May 23, 2016 in the presence of the Prime Minister of India and President of Iran. ECGC hosted and chaired 2 BRICS Heads of ECAs Meeting in New Delhi on October 13, 2016, 2nd BRICS Technical Workshop on December 01- 02, 2016 at Hyderabad and G12 Heads of ECAs meeting on February 20-21, 2017 at Chennai.

As directed by the Government of India, ECGC has been participating in the International Working Group (IWG) on Export Credits to evolve a set of international guidelines on the officially – supported export credit proposals for Projects/Export of Capital goods involving a credit period of more than 2 years.

ECGC is in discussion with African Trade Insurance Agency (ATI) to explore the possibilities of supporting exports to African Region through reinsurance and coinsurance. ATI provides political risk and trade credit risk insurance products with the objective of reducing the business risk and cost of doing business in Africa

The Parliamentary Standing Committee on Commerce in its 125th report, while appreciating the efforts being undertaken by ECGC for overall growth of Indian exports, the Committee has opined that the framework of export credit needs to be made more robust and hence ECGC needs to be adequately capitalized.  In addition, while commending the work of ECGC in covering the banks, owing to high risk that it has to bear, once again they recommend that ECGC should be heavily capitalized.

The company’s contribution in the last decade by way of claim settlements of around Rs.7000 crore has provided the much needed support to exporters and relief to banking system in ensuring adequate lending to exporters.

The year ahead looks challenging for the exporters and the Ministry of Commerce is taking several steps to boost exports from the country. ECGC is also looking forward to partner with government in its initiatives by making credit insurance more easily accessible for the exporters.There are many export friendly initiatives under discussion with the regulator and the Government, she said.ENDS.

About the Author

Sachin Murdeshwar
Sachin Murdeshwar is a Sr.Journalist and Columnist in several Mainline Newspapers and Portals.He is an ardent traveller and likes to explore destinations to the core.

Be the first to comment on "ECGC : Reduction in insurance cost for exporters"

Leave a comment

Your email address will not be published.


*