Export Credit Guarantee Corporation of India
|Founded||30 July 1957|
|Headquarters||Mumbai, Maharashtra, India|
The Export Credit Guarantee Corporation of India Limited (ECGC) was established on 30 July 1957 with an objective to provide insurance cover in respect of risks in export trade. These risk may include loss of money on account of foreign buyer becoming bankrupt or sudden import or exchange restrictions resulting in stopping of payments etc. The Export Credit Guarantee Corporation of India Limited is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Government of India had initially set up Export Risks Insurance Corporation (ERIC) in July 1957. It was transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1957 and to Export Credit Guarantee Corporation of India in 1983.
ECGC of India Ltd, was established in July, 1957 to strengthen the export promotion by covering the risk of exporting on credit. It functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. It is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community.
ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. The present paid-up capital of the company is Rs.900 crores and authorized capital Rs.1000 crores. Shri Anand Sharma,Former Minister of Commerce & Industry, Government of India, inaugurated the first overseas office of ECGC in London on September 17, 2013.
What does ECGC do?
- Provides a range of credit risk insurance covers to exporters against loss in export of goods and services.
- Offers Export Credit Insurance for Bankers and financial institutions to enable exporters to obtain better facilities from them.
- Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan.
How does ECGC help exporters?
- Offers insurance protection to exporters against payment risks
- Provides guidance in export-related activities
- Makes available information on different countries with its own credit ratings
- Makes it easy to obtain export finance from banks/financial institutions
- Assists exporters in recovering bad debts
- Provides information on credit-worthiness of overseas buyers
Need for export credit insurance
Payments for exports are open to risks even at the best of times. The risks have assumed large proportions today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result. Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of payments for goods imported. In addition, the exporters have to face commercial risks of insolvency or protracted default of buyers. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. Export credit insurance is designed to protect exporters from the consequences of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss.
Cooperation agreement with MIGA (Multilateral Investment Guarantee Agency) an arm of World Bank. MIGA provides:
- Political insurance for foreign investment in developing countries.
- Technical assistance to improve investment climate.
- Dispute mediation service.
Under this agreement protection is available against political and economic risks such as transfer restriction, expropriation, war, terrorism and civil disturbances etc...
- Largest Policy – short term Rs.450 crores
- Largest database on buyers 8 lakhs
- Largest credit limit Rs.80 Crores
- Largest claim paid Rs.120 crores
- Quickest claim paid 2 days
- Highest compensation-Iraq Rs 788 Crores
- on 31.3.2012 ECGC has achieved a magical milestone of Rs.1000 Crores of premium income......well deserved achievement by the efforts put in by All the officers of the Corporation. Thanks are due to the parent ministry officials, Export Customers and all Nationalised and other private Banks.....
ECGC now offers various products for the exporters and bankers. If readymade products are NOT suited to an exporter/banker then ECGC designs tailor made products.
- Bohra, Harsh. International Trade and Finance. Jodhpur: Wide Vision. pp. Page #175 Chapter Export Import Finance.
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