ECGC offers credit risk insurance covers to exporters and banks. The corporation provides a range of insurance covers to Indian exporters against commercial risks of non-payment by the overseas importers as well as the country risks caused due to political developments. A V Muralidharan, chairman and managing director, ECGC, spoke to HT on a range of issues. Excerpts:
What is ECGC’s role in safeguarding payment of exporters in international trade?
ECGC is a credit insurance organisation working under the administrative control of the commerce ministry. The corporation issues credit insurance covers to exporters to protect them against the payment risks that may arise due to non-payments risks of overseas buyers and importing countries. The corporation also issues credit insurance covers to banks for their working capital finance for exporters protecting the banks against their lending risks.
What’s the fee structure and premium percentage of the insured value?
Exporters can choose to cover a single consignment, a single buyer or a series of shipments and more than one buyer. Premium rates are determined on two broad parameters — country to which the shipments are made and the payment terms. Rates are separate for transaction based covers, turnover covers and exposure based covers
How does ECGC assist small and medium enterprises in their exports?
There are exclusive covers available for the micro, small and medium exporters. The Small Exporters Policy is designed to help exporters with annual exports not exceeding Rs. 50 lakh to provide higher coverage of 95 per cent for buyer risks and 100 per cent for country risks.
What are the terms and conditions applicable for the insurance holder?
The normal tenets of insurance are applicable to the credit insurance as well such as utmost good faith and the existence of a genuine export transaction. An exporter can seek insurance for a single shipment, a series of shipments to a single buyer and all shipments to all buyers.