The ECGC Limited is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian. Besides above, ECGC also offers some Special Schemes, such as Transfer guarantees, (covering risk on transfer of funds), Scheme for Small Exporters. Special Schemes – ECGC. Suitability. Special schemes consists of bundle of covers addressing the needs of banks and investors in foreign venture. This apart .
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Ten percent of the total premium payable and premium for the first two years should be paid at the time of issue of the Policy. For investment in any country to qualify for investment insurance, schemd should preferably be a bilateral agreement protecting investment of one country in the other. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the ectc and economic uncertainties.
In order to increase Project exports and to encourage Project exporters Govt. ECGC may consider providing cover in the absence of any sdheme agreement provided it is satisfied that the general laws of the country afford adequate protection to the Indian investments. Equity Any contribution made to the enterprise in return for shares either by cash remittances or by way of export of capital goods or services can be covered.
If the additional investment is made out of retained profits, which are not eligible for dcgc such as investment will not be eligible for cover. Income from the premium is allocated over the tenor of the cover extended.
Where the risks are covered by the ECGC, banks should not slacken their efforts towards realisation of their dues against long outstanding export bills. The risks of war, expropriation and restriction on remittances are covered under the scheme. However, cover can be extended for payment specified in other convertible currencies at the discretion of ECGC.
Longer credit period may be approved only in the case of exceptionally large Projects if the circumstances of the case justify it. The confirming bank will suffer a loss if the foreign bank fails to reimburse it with the schemd paid to scjeme exporter.
The cover would be available for the original ecg together with annual dcheme or interest receivable. These schemes are targeted at specific audiences such as banks, investors in foreign countries and exporters taking up long term projects abroad, covering distinct risks faced by them.
The amount of claim paid by the Corporation shall become refundable to the Corporation with interest if the Contractor fails to take steps for effecting recovery.
Percentage of cover is 90 – can be reduced.
schee Transfer Guarantee is issued, at the option of the bank to cover either political risks alone, or both political and commercial risks. This scheme provides protection g. Applications for the purpose are to be submitted to the Authorised Dealer the financing bankwhich will forward applications beyond its delegated powers to the EXIM Bank. The overseas investment may be made either by way of equity or by way of loans Equity Any contribution made to the enterprise in return for shares either by cash remittances or by way of export of capital goods or services can be covered.
For further details go to http: The services offered by ECGC are in the nature of credit insurance products.
Special Schemes of ECGC
Recommendations These scheme are targeted at specific audiences such as banks, investors in foreign countries and exporters taking up long term projects abroad, covering distinct risks faced by them. The Transfer Guarantee seeks to safeguard banks in India against losses arising out of such risks. GST rate on preserved meat, fish, crustaceans etc. The period of insurance cover would not normally exceed 15 years. All contracts for export on deferred payment terms and contracts for turnkey Projects and construction works abroad require prior clearance of Authorised 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 Wcgc.
Terms of payment To be eligible for cover under specific policies, the terms of payment for the export contracts should be in line with ecbc practices in the international markets.
How does Letter of Credit work? Where EPC is taken for a single guarantee, the bank is required to pay the full premium in advance. Types of Insurance Documents.
The overseas investment may be made either by way of equity or by way of loans. The loss or gain within a range of 2 percent of the reference rate will go to the exporter’s account. The risks of war, expropriation and restriction on remittances are covered under the schemes. Initially cover is issued for 3 years. Special schemes consist of bundle of covers addressing the needs of banks and Investors in foreign venture.
It would be necessary for the interested persons to consult ECGC for ascertaining specific terms of cover. It covers exchange fluctuation risk of exporters of capital goods, civil engineering contractors and consultants who may have to receive foreign currency payments over a period of years for their exports, construction works or services. ECGC enters into agreement with the exporters for providing cover mentioning the terms and conditions alongwith the maximum liability.
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 investments.
Export Credit Guarantee Corporation of India
Dividend and Profit In case of equity the investor can choose to cover the original investment as well as his share of retained earnings and dividends declared, to the extent they are eligible for repatriation. It covers exchange fluctuation risk of exporters of capital goods, civil engineering contractors and consultants who may have to receive foreign currency payments over a period of years for their exports, construction works or services.
ECGC provides protection to banks against non-payment of post-shipment credit by exporters. In case of loan, the insurance will cover the principal as well as interest actually earned. The former covers political risks in respect of contracts ecc Overseas Governments or where Government and the latter schemr risks guarantee the payments.
To find out the premium payable for any particular contract, In order to be sure about the availability of the cover, exporters are advised to get in-principle approval of ECGC and obtain the premium rates well before concluding contracts. Premium is taken up front. The salient features of the scheme may be obtained from ECGC.
Export credit insurance is designed to protect exporters from the schene of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss. The National Export Insurance Account NEIA has been set up by the Government of India to provide credit insurance support to exporters where ECGC is not in a position to do so due to its own underwriting constraints and where the export is strategically important in the long term interests of the country.
The investment may be either in cash or in the form of export of Indian capital goods and services.