ecgc policies, guarantees and claim procedures
TRANSCRIPT
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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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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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(ecent %nterventions4implemented
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
:isit us at
www+ecgc+in