ECGC

ECGC
Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the
Government of India to strengthen the export promotion drive by covering the risk of exporting
on credit.
Being essentially an export promotion organization, 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.800 crores and authorized capital Rs.1000 crores.
What does ECGC do?
• Provides a range of credit risk insurance covers to exporters against loss in export of
goods and services.
• Offers guarantees to banks 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?
ECGC
• 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.
Credit Insurance Policies

SCR or Standard Policy
Shipments (Comprehensive Risks) Policy, commonly known as the Standard Policy, is the one
ideally suited to cover risks in respect of goods exported on short-term credit, i.e. credit not
exceeding 180 days. This policy covers both commercial and political risks from the date of
shipment. It is issued to exporters whose anticipated export turnover for the next 12 months is
more than Rs.50 lacs. (The appropriate policy for exporters with an anticipated turnover of Rs.50
lacs or less is the Small Exporter's Policy, described separately).
What are the risks covered under the Standard Policy?
Under the Standard Policy, ECGC covers, from the date of shipment, the following risks:
a. Commercial Risks
• Insolvency of the buyer.
• Failure of the buyer to make the payment due within a specified period, normally four
months from the due date.
• Buyer's failure to accept the goods, subject to certain conditions.
b. Political Risks
• Imposition of restriction by the Government of the buyer's country or any

Government action, which may block or delay the transfer of payment made by the
buyer.
• War, civil war, revolution or civil disturbances in the buyer's country. New import
restrictions or cancellation of a valid import license in the buyer's country.
• Interruption or diversion of voyage outside India resulting in payment of additional

freight or insurance charges which can not be recovered from the buyer.
• Any other cause of loss occurring outside India not normally insured by general
insurers, and beyond the control of both the exporter and the buyer.
Small Exporters Policy

The Small Exporter's Policy is basically the Standard Policy, incorporating certain improvements
in terms of cover, in order to encourage small exporters to obtain and operate the policy. It is
issued to exporters whose anticipated export turnover for the period of one year does not exceed
Rs.50 lacs.
In what respects is the Small Exporter's Policy different from the Standard Policy?
Period of Policy: Small Exporter's Policy is issued for a period of 12 months, as against 24
months in the case of Standard Policy.
Minimum premium: Premium payable will be determined on the basis of projected exports on
an annual basis subject to a minimum premium of Rs. 2000/- for the policy period.
No claim bonus in the premium rate is granted every year at the rate of 5% (as against once in
two years for Standard Policy at the rate of 10%).
Declaration of shipments: Shipments need to be declared quarterly (instead of monthly as in the

case of Standard Policy).
Declaration of overdue payments: Small exporters are required to submit monthly declarations
of all payments remaining overdue by more than 60 days from the due date, as against 30 days in
the case of exporters holding the Standard Policy.
Percentage of cover: For shipments covered under the Small Exporter's Policy ECGC will pay
claims to the extent of 95% where the loss is due to commercial risks and 100% if the loss is
caused by any of the political risks (Under the Standard Policy, the extent of cover is 90% for
both commercial and political risks).
Waiting period for claims: The normal waiting period of 4 months under the Standard Policy
has been halved in the case of claims arising under the Small Exporter's Policy.
Change in terms of payment of extension in credit period: In order to enable small exporters
to deal with their buyers in a flexible manner, the following facilities are allowed:
• A small exporter may, without prior approval of ECGC convert a D/P bill into DA bill,
provided that he has already obtained suitable credit limit on the buyer on D/A terms.
• Where the value of this bill is not more than Rs.3 lacs, conversion of D/P bill into D/A
bill is permitted even if credit limit on the buyer has been obtained on D/P terms only, but
only one claim can be considered during the policy period on account of losses arising from
such conversions.
• A small exporter may, without the prior approval of ECGC extend the due date of
payment of a D/A bill provided that a credit limit on the buyer on D/A terms is in force at
the time of such extension.
Resale of unaccepted goods: If, upon non-acceptance of goods by a buyer, the exporter sells the
goods to an alternate buyer without obtaining prior approval of ECGC even when the loss
exceeds 25% of the gross invoice value, ECGC may consider payment of claims upto an amount
considered reasonable, provided that ECGC is satisfied that the exporter did his best under the
circumstances to minimize the loss.
In all other respects, the Small Exporter's Policy has the same features as the Standard Policy.
Specific Shipment Policy - Short Term (SSP-ST)

Specific Shipment Policies - Short Term (SSP-ST) provide cover to Indian exporters against
commercial and political risks involved in export of goods on short-term credit not exceeding
180 days. Exporters can take cover under these policies for either a shipment or a few shipments
to a buyer under a contract. These policies can be availed of by
(i) exporters who do not hold SCR Policy and
(ii) by exporters having SCR Policy,
in respect of shipments permitted to be excluded from the preview of the SCR Policy.
What are the different types of SSP (ST)?
Different types of SSP (ST)
• Specific Shipments (commercial and political risks) Policy - short-term.
• Specific Shipments (political risks) Policy - short-term.
• Specific Shipments (insolvency & default of L/C opening bank and political risks)
Policy - short-term.
Export (Specific Buyers) Policy

Buyer wise Policies - Short Term (BP-ST) provide cover to Indian exporters against commercial
and political risks involved in export of goods on short-term credit to a particular buyer. All
shipments to the buyer in respect of whom the policy is issued will have to be covered (with a
provision to permit exclusion of shipments under LC). These policies can be availed of by:
i) exporters who do not hold SCR Policy and
ii) by exporters having SCR Policy,
In case all the shipments to the buyer in question have been permitted to be excluded from the
purview of the SCR Policy.
What are the different types of BP (ST)?
• Buyerwise (commercial and political risks) Policy - short-term
• Buyerwise (political risks) Policy - short-term.
• Buyerwise (insolvency & default of L/C opening bank and political risks) Policy -
short-term.
Export Turnover Policy

Turnover policy is a variation of the standard policy for the benefit of large exporters who
contribute not less than Rs. 10 lacs per annum towards premium. Therefore all the exporters who
will pay a premium of Rs. 10 lacs in a year are entitled to avail of it.
In what respects is the turnover policy different from a standard policy?
The turnover policy envisages projection of the export turnover of the exporter for a year and the
initial determination of the premium payable on that basis, subject to adjustment at the end of the
year based on actuals. The policy provides additional discount in premium with an added
incentive for increasing the exports beyond the projected turnover and also offers simplified
procedure for premium remittance and filing of shipment information. It also provides for higher
discretionary credit limits on overseas buyers, based on the total premium paid by the exporter
under the policy. The turnover policy is issued with a validity period of one year. In most of the
other respects the provisions relating to standard policy will apply to turnover policy.
Buyer Exposure Policies

Presently, in the policies offered to exporters premium is charged on the export turnover, though
the Corporation’s exposure on each buyer is controlled through a system of approval of credit
limits on the buyer for covering commercial risks. While this suits the small and medium
exporters, many large exporters having large number of shipments have been complaining about
the volume of returns to be filed under the policy necessitating the deployment of their resources
for this purpose and also resulting in possible unintentional omissions or commissions in such
reporting, which have an impact on the settlement of claims. There has been a demand for
simplification of the procedures as well as for rationalization of the premium structure.
Considering the requirements of such exporters, the Corporation has decided to introduce
policies on which premium would be charged on the basis of the expected level of exposure.
Two types of exposure policies – one for covering the risks on a specified buyer and another for
covering the risks on all buyers- are offered.
Two types of Exposure policies are offered, viz,
• Exposure (Single Buyer) Policy – for covering the risks on a specified buyer and
• Exposure (Multi Buyer) Policy – for covering the risks on all buyers.
What does an Exposure (Single Buyer) Policy cover?
An exporter can choose to obtain exposure based cover on a selected buyer. The cover would be
against commercial and political risks attached to the buyer for both non-LC and LC
transactions. A separate Buyer Exposure Policy will be issued for each buyer covering all the
exports to be made to the buyer during a period of twelve months. If the exporter has opted for
commercial and political risks cover, failure of the LC opening bank in respect of exports against
LC will also be covered, for the banks with World Rank (WR) up to 25,000 as per latest
Banker’s almanac. For covering any bank with ranking beyond that level, the exporter has to
obtain specific approval from the branch, which issued the policy prior to making the shipment.
For covering the political risks only, in respect of LC transactions or shipments to associates,
Buyer Exposure policy with endorsement restricting the cover to political risks only with
significantly less premium is offered. This policy can be availed by exporters holding Standard
Policy in respect of any of their buyers. Shipments to the buyers covered under Buyer Exposure
Policies would be excluded from the purview of the Standard Policy. Risks covered would be
same as covered under the existing Buyer wise Policy.
Consignment Exports Policy

(Stockholding Agent and Global Entity)
Economic liberalization and gradual removal of international barriers for trade and commerce are
opening up various new avenues of export opportunities to Indian exporters of quality goods.
One of the methods being increasingly adopted by Indian exporters is consignment exports
where the goods are shipped and held in stock overseas ready for sale to overseas ready for sale
to overseas buyers as and when orders are received. To protect the Indian Exporters from
possible losses when selling goods to ultimate buyers, it was decided to introduce Consignment
Policy Cover.
There are two policies available for covering consignment export viz;
• Consignment Exports (Stock-holding Agent)

• Consignment Exports (Global Entity Policy)
Under what circumstances, Consignment Exports (Stock Holding Agent) Policy cover can
be availed of?
A consignment Exports (Stock-holding Agent) Policy will be appropriate for each exporter –
stock holding agent combination provided the following criteria are satisfied.
• Merchandise are shipped to an overseas entity in pursuance of an agency agreement;
• The overseas agent would be an independent and separate legal entity with no
associate/sister concern relationship with the exporter;
• The agent’s responsibilities could be any or all of the following, viz., receiving the
shipment, holding the goods in stock, identifying ultimate buyers and selling the
goods to them in accordance with the directions, if any, of his principal (exporter);
and
• The sales being made by the agent would be at the risk and on behalf of the exporter
(whether or not such sales are in the agent’s own name or otherwise) in consideration
of a commission or some similar reward or compensation on sales completed.
Service Policy
Where Indian companies conclude contracts with foreign principals for providing them with
technical or professional services, payments due under the contracts are open to risks similar to
those under supply contracts. In order to give a measure of protection to such exporters of
services, ECGC has introduced the Services Policy.
What are the different types of Services Policy and what protection do they offer?
• Specific Services Contract (Comprehensive Risks) Policy;
• Specific Services Contract (Political Risks) Policy;
• Whole-turnover Services (Comprehensive Risks) Policy; and
• Whole-turnover Services (Political Risks) Policy
Specific Services Policy, as its name indicates, is issued to cover a single specified contract. It is
issued to provide cover for contracts, which are large in value and extend over a relatively long
period. Whole-turnover services policies are appropriate for exporters who provide services to a
set of principals on a repetitive basis and where the period of each contract is relatively short.
Such policies are issued to cover all services contracts that may be concluded by the exporter
over a period of 24 months ahead.
The Corporation would expect that the terms of payment for the services are in line with
customary practices in international trade in these lines. Contracts should normally provide for
an adequate advance payment and the balance should be payable periodically based on the
progress of work. The payments should be backed by satisfactory security in the form of Letters
of Credit or bank guarantees.
Services policies are designed to cover contracts under which only services are to be rendered.
Contracts under which the value of services to be rendered forms only a small part of a contract
involving supply of machinery or equipment will be covered under an appropriate specific policy
for supply contracts.
Specific Policy for Supply Contract

The Standard Policy is a whole turnover policy designed to provide a continuing insurance for
the regular flow of an exporter's shipments for which credit period does not exceed 180 days.
Contracts for export of capital goods or turnkey projects or construction works or rendering
services abroad are not of a repetitive nature and they involve medium/long-term credits. Such
transactions are, therefore, insured by ECGC on a case-to-case basis under specific policies.
What are the formalities to be completed before applying for specific policies for contracts?
All contracts for export on deferred payment terms and contracts for turnkey projects and
construction works abroad require prior clearance of Authorized Dealers, EXIM Bank or the
Working Group in terms of powers delegated to them as per exchange control regulations
(Kindly refer to 'Projects Exports Manual' of Reserve Bank of India. For further details go to
www.rbi.org.in). Applications for the purpose are to be submitted to the Authorized Dealer (the
financing bank), which will forward applications beyond its delegated powers to the EXIM
Bank. Proposals for Specific Policy are to be made to ECGC after the contract has been cleared
by the Authorized Dealer, EXIM Bank or the Working Group, as the case may be.
Insurance Cover for Buyer's Credit and Line of Credit
Buyer's Credit is a credit extended by a bank in India to an overseas buyer enabling the buyer to
pay for machinery and equipment that he may be importing from India for a specific project.
A Line of Credit is a credit extended by a bank in India to an overseas bank, institution or
government for the purpose of facilitating import of a variety of listed goods from India into the
overseas country. A number of importers in the overseas country may be importing the goods
under one Line of Credit.
ECGC has evolved schemes to protect the lending banks from certain risks of non-payment.
These covers take the form of an agreement between the lending bank and ECGC and are issued
on a case to case basis. Credit terms and the length of the credit period should be in conformity
with what is appropriate for the export of the relevant items. There should be adequate security
for the repayments to be made by the borrower.
• Cover can be granted either for political risks or for comprehensive risks. Political
risks covered under the scheme are:
• The occurrence of war, hostilities, civil war, revolution, rebellion, insurrection or

other disturbances in the country of overseas party.
• The operation of law or of an order, decree or regulation having the force of law
which in circumstances outside the control of the lender and/or the overseas party,
prevents, restricts or controls, the transfer of the sums due to the lender by the
overseas party under the Financial Agreement.
If ECGC agrees to provide comprehensive risks cover, the risk of protracted default of the
borrower to pay the amounts due under the loan agreement and insolvency of the borrower,
where applicable, will be covered in addition to the political risks mentioned above. The
premium rates applicable to comprehensive risk cover will naturally be higher than that for
political risks cover. Normally ECGC covers up to 85% of the loss.
The premium rates depends on the country to which exports are made and the period of
repayment.
When is the premium to be paid for the cover for Buyer's Credit and Line of Credit?
At least 20% of the total amount of premium should be paid in advance. The balance amount of
premium may be paid on a quarterly basis in proportion to the amount of credit disbursed.
Guarantees to Banks
Packing Credit Guarantee
Timely and adequate credit facilities at the pre-shipment stage are essential for exporters to
realize their full export potential. Exporters may not, however, be easily able to obtain such
facilities from their bankers for several reasons, e.g. the exporter may be relatively new to export
business, the extent of facilities needed by him may be out of proportion to the equity of the
firms or the value of collateral offered by the exporter may be inadequate. The Packing Credit
Guarantee of ECGC helps the exporter to obtain better and adequate facilities from their bankers.
The Guarantees assure the banks that, in the event of an exporter failing to discharge his
liabilities to the bank, ECGC would make good a major portion of the bank's loss. The bank is
required to be co-insurer to the extent of the remaining loss.
What are the loans and advances eligible for Packing Credit Guarantee?
Any loan given to an exporter for the manufacture, processing, purchasing or packing of goods
meant for export against a firm order or Letter of Credit qualifies for Packing Credit Guarantee.
Pre-shipment advances given by banks to parties who enter into contracts for export of services
or for construction works abroad to meet preliminary expenses in connection with such contracts
are also eligible for cover under the Guarantee. The requirement of lodgement of Letter of Credit
or export order for granting packing credit advances is waived if the bank grants such advances
in accordance with the instructions of the Reserve Bank of India in that respect.
EXPORT CREDIT INSURANCE PACKING CREDIT

ELIGIBILITY: A bank or a financial institution authorized to deal in foreign exchange can
obtain the Individual Packing Credit Cover for each of its exporter clients who has been
classified as a standard asset and whose CR is acceptable to ECGC.
PERIOD OF COVER: 12 months
ELIGIBLE ADVANCES: All packing credit advances as per RBI guidelines.
PROTECTION OFFERED: Against losses that may be incurred in extending packing credit
advances due to protracted default or insolvency of the exporter-client.
PERCENTAGE OF COVER: 66-2/3%
PREMIUM: 12 paise per Rs.100 p.m. on the highest amount outstanding on any day during the
month.
MAXIMUM LIABILITY: 66-2/3% of the Packing Credit Limit sanctioned to the account
being covered.
IMPORTANT OBLIGATIONS OF THE BANK: Monthly declaration of advances granted
and payment of premium before 10th of the succeeding month. Approval of the Corporation for
extension of due date beyond 360 days from due date to be obtained. Default to be reported
within 4 months from due date or extended due date of advances, if not recovered, filing of claim
within 6 months of the Report of Default. Recovery action after payment of claim and sharing of
recovery.
HIGHLIGHTS: Bank can take the cover selectively.
EXPORT CREDIT INSURANCE-BRANCH-WISE PACKING

CREDIT(ECIB-BIPC)
ELIGIBILITY: A branch of a bank or a financial institution authorized to deal in foreign
exchange can obtain the Branch-wise Packing Credit Cover in respect of one or more of its
exporter clients who has been classified as a standard asset and whose CR is acceptable to
ECGC.
ELIGIBLE ADVANCES: All packing credit advances are as per RBI guidelines.
PERCENTAGE OF COVER: 66-2/3%
month.
MAXIMUM LIABILITY: 66-2/3% of the aggregate of Packing Credit Limits of the accounts
being covered.
and payment of premium before 10th of succeeding month. Approval of the Corporation for
recovery.
HIGHLIGHTS: Submission of a single proposal and a single monthly declaration for all the
accounts that are being covered. Bank Branch can include additional accounts during the cover
period with due approval of the Corporation. Exclusion of account(s) permitted at the time of
renewal only. No enhancement in limit without approval of ECGC. Reduction in premium rate to
11 paise could be allowed provided branch estimates a premium of not less than Rs. 50,000
during a month under the cover.
EXPORT CREDIT INSURANCE-SECTOR-WISE PACKING CREDIT

(ECIB -SIPC)
ELIGIBILITY: Banks not holding the Whole-turnover Packing Credit cover can opt for cover
for their accounts coming under a Zone/Circle.
ELIGIBLE ADVANCES: All packing credit advances are as per RBI guidelines.
PERCENTAGE OF COVER: 75%
PREMIUM: Between 6 and 9.5 paise per Rs.100 p.m. payable on the average daily product
depending on the extent of business covered.
MAXIMUM LIABILITY: To be fixed suitably in relation to the outstanding in the accounts to
be covered.
recovery.
HIGHLIGHTS: Submission of a single proposal and a single monthly declaration for all
accounts being covered. Can exclude any or some of the accounts. Such exclusion cannot exceed
30% of total outstanding of the bank. Such exclusion would be subject to either increase in
premium rate by one paisa or decrease in cover by 10 per cent. Bank has the option to select any
one. In case of such exclusion Corporation also has the option to exclude any account. Accounts
once included cannot be excluded during the cover period. New accounts could be included with
the approval of the Corporation. Minimum assured premium shall be Rs.100 lacs.
EXPORT CREDIT INSURANCE-WHOLE-TURNOVER PACKING

CREDIT (ECIB-WTPC)
ELIGIBILITY: A bank or a financial institution dealing in foreign exchange is eligible to
obtain this Whole-turnover Cover for all its accounts.
MINIMUM CRITERIA: No. of Accounts: 25; Minimum assured Premium: Rs. 5 lacs.
ELIGIBLE ADVANCES: All packing credit advances as per RBI guidelines.

PERCENTAGE OF COVER: For banks taking the cover for the first time it is 75% up to
Grade Percentage Limit fixed and 65% beyond. (For others varies from 55% to 75% depending
on claim premium ratio of the bank.). For Small Scale Exporters (SSE)/ Small Scale Industrial
Units (SSI), it is 90%.
PREMIUM: For a fresh cover it is 8 paise. (For others, varies from 6 to 9.5 paise per Rs. 100
p.m. depending on claim premium ratio.)
MAXIMUM LIABILITY: Overall limit up to which claims can be paid by the Corporation in
respect of advances granted in any ECIB year and will be determined on the basis of aggregate
outstanding.
and payment of premium before the end of the month. Approval of the Corporation for extension
of due date beyond 360 days from due date to be obtained. Default to be reported within 4
months from due date or extended due date of advances, if not recovered, filing of claim within 6
months of the Report of Default. Recovery action after payment of claim and sharing of
recovery.
HIGHLIGHTS: Banks can exercise option to exclude SSI, Govt. Cos., and Units in OBU under
the Cover. Submission of a single proposal for all accounts to be covered. (Premium is payable
on average outstanding for the month. Declaration to be submitted by the end of the succeeding
month.) Higher percentage of cover and lower premium rate as compared to individual credit
insurance cover. Less procedural formalities, administrative work and greater convenience.
EXPORT CREDIT INSURANCE-EXPORT PRODUCTION FINANCE (ECIB-EPF)

ELIGIBILITY: Any bank or financial institution authorized to deal in foreign exchange can
obtain the Export Production Finance Cover for each of its exporter clients who has been
classified as a standard asset and whose CR is acceptable to ECGC.
PERIOD OF COVER: 12 months.
ELIGIBLE ADVANCES: Advances granted at pre-shipment stage over and above FOB value.
advances to the full extent of cost of production due to protracted default or insolvency of the
exporter-client.
PERCENTAGE OF COVER: 66-2/3%.
month.
MAXIMUM LIABILITY: 66-2/3% of the Packing Credit Limit sanctioned to the account
being covered.
within 6 months of the Report of Default. Recovery action taken after payment of claim followed
by sharing of recovery.
HIGHLIGHTS: Bank can take the cover selectively. Banks having ECIB-WTPC are eligible
for concessionary premium rate and higher percentage of cover as applicable.
EXPORT CREDIT INSURANCE-INDIVIDUAL POST -SHIPMENT (ECIB -INPS)
ELIGIBILITY: Any bank or financial institution who is an authorized dealer in foreign

exchange can obtain the Individual Post-shipment Export Credit Cover in respect of each of its
exporter-clients who is holding the Standard Policy of ECGC WITHOUT any exclusion.
ELIGIBLE ADVANCES: All post-shipment advances given through purchase, negotiation or

discount of export bills or advances against bills sent on collection.
PROTECTION OFFERED: Against losses that may be incurred in extending post-shipment
PERCENTAGE OF COVER: 75% for advances against bills drawn on buyers other than
associates and 60% for advances against bills drawn on associates.
PREMIUM: 6 paise per Rs. 100 p.m. payable on the highest amount outstanding on any day
during the month.
MAXIMUM LIABILITY: 75% of the Post-shipment Limits of the account.
recovery.

exchange can obtain the Individual Post-shipment Export Credit Cover in respect of its exporter
client who is holding the appropriate Comprehensive Risks Policy of ECGC but WITH
SPECIFIC EXCLUSIONS.

PERCENTAGE OF COVER: 75% for advances against bills drawn on buyers other than
associates. 60% for advances against bills drawn on associates provided relevant shipments are
covered for comprehensive risks.
PREMIUM: 9 paise per Rs.100 p.m. payable on the highest amount outstanding on any day
during the month.
MAXIMUM LIABILITY: 75% of the Post-shipment Limit sanctioned to the account.
and payment of premium before 10th of the succeeding month. Approval of the Corporation for
extension of due date beyond 180 days (360 days for status holders) from due date to be
obtained. Default to be reported within 4 months from due date or extended due date of
advances, if not recovered, filing of claim within 6 months of the Report of Default. Recovery
action after payment of claim and sharing of recovery.

exporter-clients who is NOT HOLDING the Standard Policy of ECGC.
ELIGIBLE ADVANCES: (a) All post-shipment advances against L/C bills. (b) All other post-
shipment advances except bills drawn on associates.
PREMIUM: 9 paise per Rs. 100 p.m. in respect of (a) and 13 paise per Rs.100 in respect of (b)
under Eligible Advances above payable on the highest amount outstanding on any day during the
month.
MAXIMUM LIABILITY: 60% of the Post-shipment Limits of the account.

exporter-clients who is holding the appropriate Comprehensive Risks Policy of ECGC
EXCLUDING cover for shipments made against L/Cs.

PERCENTAGE OF COVER: 75% for advances against bills drawn on buyers other than L/C
bills and on associates. 60% on associates and L/C bills.
PREMIUM: 9 paise per Rs.100 p.m. payable on the highest amount outstanding on any day
during the month.
MAXIMUM LIABILITY: 75% of the Post-shipment Limit sanctioned to the account.
ELIGIBILITY: A bank or a financial institution dealing with foreign exchange is eligible to

obtain this Whole-turnover Cover for all its accounts.
MINIMUM CRITERIA: No. of Accounts: 25; Minimum assured Premium: Rs. 5 lacs.
ELIGIBLE ADVANCES: All post-shipment advances granted to exporters by way of

purchase/discount/negotiation of export documents or advances granted against export bills sent
on collection basis, as per RBI guidelines.
PERCENTAGE OF COVER: Varies from 90% to 95% in respect of exporters who are
Policyholders of ECGC and 50% to 75% for non-Policyholders, depending upon the claim
premium ratio of the bank. For bills drawn on Associates of Policyholders coverage is 60% and
of non-Policyholders it is 50%.
PREMIUM: 4.5 paise per Rs. 100 p.m. if advances against L/C bills are included for cover
otherwise it is 5.5 paise.
MAXIMUM LIABILITY: An overall limit will be fixed for the bank upto which claims can be
paid by the Corporation in respect of advances granted during the ECIB-WTPS year.
and payment of premium before the end of the succeeding month. Approval of the Corporation
for extension of due date beyond 180 days (360 days for status holders) from due date to be
action after payment of claim and the subsequent sharing of recovery.
HIGHLIGHTS: Option to exclude SSI, Govt. Cos., exports to associates, units in OBU and
L/Cs under the Cover. Submission of a single proposal for all accounts to be covered.
EXPORT CREDIT INSURANCE-EXPORT FINANCE (ECIB-EF)

ELIGIBILITY: Any bank authorized to deal in foreign exchange can obtain the Export Finance
Cover in respect of its exporter-client who has been classified as a standard asset and whose CR
is acceptable to ECGC.
ELIGIBLE ADVANCES: Advances against incentives such as cash assistance, duty drawback,
etc., receivable at post-shipment stage.
advances against incentives due to protracted default or insolvency of the exporter-client.
month.
MAXIMUM LIABILITY: 75% of the post-shipment limit sanctioned to the account.
within 6 months of the Report of Default. Recovery action after payment of claim and the
subsequent sharing of recovery.
HIGHLIGHTS: Banks can take the cover selectively. Banks having ECIB-WTPS are eligible
for concessionary premium rate and higher percentage of cover as applicable.
EXPORT CREDIT INSURANCE-EXPORT PERFORMANCE (ECIB-EP)

ELIGIBILITY: For banks holding ECGC Whole-turnover Packing Credit Cover (ECIB-
WTPC), cover under EP shall be considered for all their standard accounts irrespective of credit
ratings. In respect of other banks, it shall be only for standard accounts with acceptable credit
ratings.
PERIOD OF COVER: As per the period of the bank guarantee.
ELIGIBLE COVER: Bank guarantee issued in support of export obligations to EPCs, CBs,
STC, MMTC or recognized Export Houses, Bid Bond, Performance Bond, Customs, Central
Excise and Sales Tax Authorities, L/Cs opened for purchase/import of raw materials in respect of
export transactions.
PROTECTION OFFERED: Against losses that the bank may suffer on account of bank
guarantees given by it on behalf of exporters and due to protracted default or insolvency of the
exporter-client
PREMIUM: 6.5 paise per Rs.100 p.m. on the Bank guarantee value and period.
MAXIMUM LIABILITY: 75% of the Cover value.
IMPORTANT OBLIGATIONS OF THE BANK: Premium is payable in advance. Approval
of the Corporation for any extension in the period of the bank guarantee to be obtained. If the
exporter fails to meet the payment as and when the guarantee is invoked or when it falls due
under L/C, necessary steps to be taken for recoveries, including recall of advances and institution
of legal proceedings. Default to be reported within 4 months from due date or extended due date
of advances, if not recovered, filing of claim within 6 months of the Report of Default. Recovery
EXPORT CREDIT INSURANCE-EXPORT PERFORMANCE (ECIB-EPAP)
WTPC), cover under EP (Advance Payment) shall be considered for all their standard accounts
irrespective of credit ratings. In respect of other banks, it shall be only for standard accounts with
acceptable credit ratings.
PERIOD OF COVER: As per the period of the cover.
ELIGIBLE COVER: Cover issued against the advance payment to be received by the exporter
from the overseas buyer.
PROTECTION OFFERED: Against losses that the bank may suffer on account of Cover given
by it on behalf of exporters.
PREMIUM: 6.5 paise per Rs.100 p.m. on the bank guarantee value and period.
MAXIMUM LIABILITY: 75% of the cover value.
of the Corporation for any extension in the period of the bank guarantee to be obtained. If the
exporter fails to meet the payment as and when the Cover is invoked, to take necessary steps for
recovery including recall and institution of legal proceedings. Default to be reported within 4
months from due date or extended due date of advances, if not recovered, filing of claim within 6
months of the Report of Default. Recovery action after payment of claim and the subsequent
sharing of recovery.
EXPORT CREDIT INSURANCE-EXPORT-PERFORMANCE COVER FOR GOLD

LOAN SCHEME (ECIB-EPGL)
WTPC), cover under EP for stand-by L/C shall be considered for all their standard accounts
ELIGIBLE COVER: Bank Guarantee/Stand-by L/Cs issued as a security under Gold Loan
Scheme.
PROTECTION OFFERED: Against losses that the bank may incur in extending the bank
guarantee due to protracted default or insolvency of the exporter-client.
PREMIUM: 6 paise per Rs.100 p.m. on the value of the guarantee/L/C.
MAXIMUM LIABILITY: 60% of the value of the Cover.
of the Corporation for any extension in the period of the guarantee to be obtained. If the exporter
fails to meet the payment as and when the guarantee is invoked or when it falls due under L/C,
necessary steps to be taken for recovery including recall and institution of legal proceedings.
Default to be reported within 4 months from due date or extended due date of advances, if not
recovered, filing of claim within 6 months of the Report of Default. Recovery action after
payment of claim and the subsequent sharing of recovery.
EXPORT CREDIT INSURANCE-EXPORT PERFORMANCE-COVER FOR

IMPORT/INLAND L/C (ECIB-EPL/C)
WTPC), cover under EP for Import/Inland L/C shall be considered for all their standard accounts
PERIOD OF COVER: As per the validity period of the L/C. In case the L/C is open ended,
cover can be considered for a period of one year renewable based on satisfactory experience.
ELIGIBLE BOND/GUARANTEE: Value of L/C in rupee guarantee issued by bank. In case of
other L/Cs, the value of L/C.
PURPOSE: L/Cs opened for import or local source of raw material. Stand-by L/Cs established
in case of export of marine products against import duty payment can also be covered.
PROTECTION OFFERED: Against losses that the bank may incur on account of bank
guarantees given on behalf of exporter-client.
PREMIUM: 6.5 paise per Rs.100 p.m. on the value of L/C for the validity period of the L/C.
MAXIMUM LIABILITY: 75% of the value of the bank guarantee.
of the Corporation for extending the period of the guarantee to be obtained and premium paid for
the extended period. If the exporter fails to meet the payment as and when the bank guarantee is
enforced or when it falls due under L/C, necessary steps to be taken for recoveries including
recall and institution of legal proceedings. Default to be reported within 4 months from due date
or extended due date of advances, if not recovered, filing of claim within 6 months of the Report
of Default. Recovery action after payment of claim and the subsequent sharing of recovery.
EXPORT CREDIT INSURANCE-WHOLE-TURNOVER EXPORT PERFORMANCE

(ECIB-WTEP)
WTPC), cover under EP shall be considered for all their standard accounts irrespective of credit
ratings. In respect of other banks, it shall be only for standard accounts with acceptable credit
ratings.
ELIGIBLE COVER: Bank Guarantees issued in favour of a single beneficiary in India where
guarantees are issued on a continued basis and the Guarantees shall be in the standardized
format.
PROTECTION OFFERED: Against losses that the bank may incur in extending the bank
guarantees due to protracted default or insolvency of the exporter-client.
PREMIUM: 6.5 paise per Rs.100 p.m. on the value of the Guarantee
MAXIMUM LIABILITY: 75% of the aggregate Guarantee Limit.
IMPORTANT OBLIGATIONS OF THE BANK: Premium is payable every month on the
value of bank guarantees executed during the month on or before the 10th of the succeeding
month in the prescribed format. Approval of the Corporation for any extension in the period of
the guarantee to be obtained. If the exporter fails to meet the payment as and when the guarantee
is enforced, bank to take necessary recovery steps including recall and institution of legal
proceedings. Default to be reported within 4 months from due date or extended due date of
HIGHLIGHTS: A single proposal for all the guarantees issued in favour of a single beneficiary.
Export Finance (Overseas Lending) Guarantee

If a bank financing an overseas project provides a foreign currency loan to the contractor, it can
protect itself from the risk of non-payment by the contractor by obtaining Export Finance
(Overseas Lending) Guarantee.
What are the premium rates applicable?
The premium rate is 0.90% per annum for 75% cover and 1.08% per annum for 90% cover.
Premium is payable in Indian Rupees. Claims under the Guarantee will also be paid in Indian
Rupees.
Special Schemes
Transfer Guarantee
When a bank in India adds its confirmation to a foreign Letter of Credit, it binds itself to honour
the drafts drawn by the beneficiary of the Letter of Credit without any recourse to him provided
such drafts are drawn strictly in accordance with the terms of the Letter of Credit. The
confirming bank will suffer a loss if the foreign bank fails to reimburse it with the amount paid to
the exporter. This may happen due to the insolvency or default of the opening bank or due to
certain political risks such as war, transfer delays or moratorium, which may delay or prevent the
transfer of funds to the bank in India. The Transfer Guarantee seeks to safeguard banks in India
against losses arising out of such risks.
Transfer Guarantee is issued, at the option of the bank to cover either political risks alone, or
both political and commercial risks. Loss due to political risks is covered upto 90% and loss due
to commercial risks upto 75%.
What are the applicable premium rates?
The premium rates depend on the country of export and the tenor of L/C.
Overseas Investment Guarantee

ECGC has evolved a scheme to provide protection for Indian Investments abroad. Any
investment made by way of equity capital or untied loan for the purpose of setting up or
expansion of overseas projects will be eligible for cover under investment insurance. The
investment may be either in cash or in the form of export of Indian capital goods and services.
The cover would be available for the original investment together with annual dividends or
interest receivable. The risks of war, expropriation and restriction on remittances are covered
under the scheme. As the investor would be having a hand in the management of the joint
venture, no cover for commercial risks would be provided under the scheme.
What are the main features of the Overseas Investment Insurance?
For investment in any country to qualify for investment insurance, there should preferably be a
bilateral agreement protecting investment of one country in the other. ECGC may consider
providing cover in the absence of any such agreement provided it is satisfied that the general
laws of the country afford adequate protection to the Indian investments.
The period of insurance cover will not normally exceed 15 years in case of projects involving
long construction period. The cover can be extended for a period of 15 years from the date of
completion of the project subject to a maximum of 20 years from the date of commencement of
investment. Amount insured shall be reduced progressively in the last five years of the insurance
period.
Exchange Fluctuation Risk Cover

The Exchange Fluctuation Risk Cover is intended to provide a measure of protection to exporters
of capital goods, civil engineering contractors and consultants who have often to receive
payments over a period of years for their exports, construction works or services. Where such
payments are to be received in foreign currency, they are open to exchange fluctuation risk as the
forward exchange market does not provide cover for such deferred payments.
What are the terms of the Exchange Fluctuation Risk Cover?
Exchange Fluctuation Risk Cover is available for payments scheduled over a period of 12
months or more, upto a maximum of 15 years. Cover can be obtained from the date of bidding
right up to the final instalment. At the stage of bidding, an exporter/contractor can obtain
Exchange Fluctuation Risk (Bid) Cover. The basis for cover will be a reference rate agreed upon.
The reference rate can be the rate prevailing on the date of bid or rate approximating it. The
cover will be provided initially for a period of twelve months and can be extended if necessary.
If the bid is successful, the exporter/contractor is required to obtain Exchange Fluctuation
(Contract) cover for all payments due under the contract. The reference rate for the contract
cover will be either the reference rate used for the Bid Cover or the rate prevailing on the date of
contract, at the option of the exporter/contractor. If the bid is unsuccessful 75 percent of the
premium paid by the exporter/contractor is refunded to him.

ECGC

Uploaded by

Copyright:

Available Formats

ECGC

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ECGC

Uploaded by

Copyright:

Available Formats

ECGC

What does ECGC do?

• Provides Overseas Investment Insurance to Indian companies investing in joint ventures

How does ECGC help exporters?

• Offers insurance protection to exporters against payment risks

• Provides guidance in export-related activities.

• 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

Credit Insurance Policies

What are the risks covered under the Standard Policy?

• Insolvency of the buyer.

• Buyer's failure to accept the goods, subject to certain conditions.

• Imposition of restriction by the Government of the buyer's country or any

• Interruption or diversion of voyage outside India resulting in payment of additional

Small Exporters Policy

Declaration of shipments: Shipments need to be declared quarterly (instead of monthly as in the

Specific Shipment Policy - Short Term (SSP-ST)

(i) exporters who do not hold SCR Policy and

(ii) by exporters having SCR Policy,

What are the different types of SSP (ST)?

Different types of SSP (ST)

• Specific Shipments (commercial and political risks) Policy - short-term.

• Specific Shipments (political risks) Policy - short-term.

Export (Specific Buyers) Policy

i) exporters who do not hold SCR Policy and

ii) by exporters having SCR Policy,

What are the different types of BP (ST)?

• Buyerwise (commercial and political risks) Policy - short-term

• Buyerwise (political risks) Policy - short-term.

Export Turnover Policy

In what respects is the turnover policy different from a standard policy?

Buyer Exposure Policies

Two types of Exposure policies are offered, viz,

What does an Exposure (Single Buyer) Policy cover?

Consignment Exports Policy

• Consignment Exports (Stock-holding Agent)

• Merchandise are shipped to an overseas entity in pursuance of an agency agreement;

• Specific Services Contract (Comprehensive Risks) Policy;

• Specific Services Contract (Political Risks) Policy;

• Whole-turnover Services (Comprehensive Risks) Policy; and

• Whole-turnover Services (Political Risks) Policy

Specific Policy for Supply Contract

Insurance Cover for Buyer's Credit and Line of Credit

• The occurrence of war, hostilities, civil war, revolution, rebellion, insurrection or

EXPORT CREDIT INSURANCE PACKING CREDIT

EXPORT CREDIT INSURANCE-BRANCH-WISE PACKING

EXPORT CREDIT INSURANCE-SECTOR-WISE PACKING CREDIT

EXPORT CREDIT INSURANCE-WHOLE-TURNOVER PACKING

ELIGIBLE ADVANCES: All packing credit advances as per RBI guidelines.

EXPORT CREDIT INSURANCE-EXPORT PRODUCTION FINANCE (ECIB-EPF)

EXPORT CREDIT INSURANCE-INDIVIDUAL POST -SHIPMENT (ECIB -INPS)

ELIGIBILITY: Any bank or financial institution who is an authorized dealer in foreign

ELIGIBLE ADVANCES: All post-shipment advances given through purchase, negotiation or

EXPORT CREDIT INSURANCE-INDIVIDUAL POST -SHIPMENT (ECIB -INPS)

ELIGIBILITY: Any bank or financial institution who is an authorized dealer in foreign

ELIGIBLE ADVANCES: All post-shipment advances given through purchase, negotiation or

EXPORT CREDIT INSURANCE-INDIVIDUAL POST -SHIPMENT (ECIB -INPS)

ELIGIBILITY: Any bank or financial institution who is an authorized dealer in foreign