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EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports.

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Presentation on theme: "EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports."— Presentation transcript:

1 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED WELCOME TO A PRESENTATION ON INSURANCE & RISK MANAGEMENT and ROLE OF ECGC

2 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED ECGC Mission To support the Indian export industry by providing cost effective insurance and trade related services to meet the needs of the Indian exporters

3 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED OBJECTIVE of ECGC To PROMOTE EXPORTS Mainly by Protecting Exporters against COMMERCIAL & POLITICAL RISKS In realising export proceeds Protecting Banks against RISK OF DEFAULT in export credit Protecting Investors against POLITICAL RISKS in Shareholders equity and loan In overseas investments

4 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED ECGC Fact sheet Established in 1957 Fully owned by GOI Under administrative control of MOCI Capital Base Highest ICRA rating of IAAA 5 Regional Offices and 51 Branch Offices All Branches ISO 9001:2000 certified Member of Berne Union MOU with GOI

5 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Key Performance Highlights Sr. No. Description Financial Years ( Audited Data) Gross Premium income Rs cr cr. 2Claims PaidRs cr cr. 3 Recoveries Received Rs cr cr.

6 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED What is Risk? Uncertainty about future outcome due to : Unexpected occurrence of events –Uncontrollable factors –Lack of Information

7 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Risk Perceptions Industry risk Business risk Risk of contract frustration Risk of physical damage Credit risk Country Risk

8 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED What is Credit Risk Definition: The potential that a debtor will fail to meet its payment obligations in accordance with agreed terms. Export credit risk: a) Buyer related problems b) Country related

9 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Risk Management Analysis, acceptance or mitigation Risk avoidance Risk Transfer Risk Sharing Risk retention

10 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED PAYMENT RISK RISK MANAGEMENT IN EXPORTS GoodsReceivables Exchange Risk Loss or Damage Marine Insurance Hedging by Authorized Dealers CREDITINSURANCE

11 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED LC Payment Risks POLITICAL RISK COUNTRY BUYERBANK LC / NON – LC COMMERCIAL RISK Payment Risks

12 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Role of ECGC as an Export Credit Insurer Providing export credit insurance covers to ExportersProviding export credit insurance covers to Exporters against loss in export of goods & services under ST & MLT (POLICY Scheme) Providing export credit insurance covers toProviding export credit insurance covers to Banks & FIs to enable exporters obtain better facilities from them (ECIB) (formerly known as Guarantees)

13 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Role of ECGC as an Export Credit Insurer Providing cover for Buyers Credit/ Line of Credit toProviding cover for Buyers Credit/ Line of Credit to Banks/ FIs Banks/ FIs Providing Overseas Investment Insurance to - Indian InvestorsProviding Overseas Investment Insurance to - Indian Investors in Overseas Ventures (Equity/Loans) in Overseas Ventures (Equity/Loans)

14 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED War, Civil war, Internal disturbances exchange transfer blockages /delay New import restrictions, cancellation of import licence, etc. Risks covered -Political Diversion of voyage due to war

15 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Insolvency of buyer/bank Non acceptance of exported shipment Default of buyer/bank Risks covered- Commercial

16 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Risks NOT considered Credit risk Non fulfillment of contractual obligations by exporter including quality dispute. Default or insolvency or any omission /commission of any agent of exporter/ buyer Failure of buyer to obtain necessary approvals for imports Causes inherent in nature of goods Exchange fluctuation risks Physical loss/damage to goods

17 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Principles of Credit Insurance Good Faith Co-insurance Spread of risks

18 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Buyer & Country Underwriting The 2 pillars of Export Credit Insurance : and Buyer Underwriting that assesses buyer risks Limit fixed on Buyer Country Underwriting that assesses country risks Country classification

19 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Products offered to Exporters Declaration Based Policies Whole Turnover 1) Standard (SCR) Policy 2) Small Exporters Policy 3) Export Turnover Policy Specific transaction 1) Specific Shipment Policy 2) Specific Buyer Policy 3) Transfer Guarantee (for Banks)

20 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Products offered to Exporters Exposure Based Policies 1)Single Buyer Exposure Policy 2) Multi buyer Exposure Policy 3) SME Policy

21 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Products offered to Exporters Consignment Based Policies 1) Consignment Export Policy 2) Global Entity Policy

22 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Products offered to Exporters Covers for IT/ITES industry 1) Software project exports policy 2) IT enabled (single customer) policy 3) IT enabled (multi customer) policy

23 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Premium Structure Basis Country Grouping - 7 fold (237 countries) ( A1, A2, B1, B2,….. D)- Higher the country group, lower the premum rates Terms of Payment- More superior the payment terms, lower the premium rate Specific approval required for Restricted Cover countries

24 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Shipments (Comprehensive Risks) Policy Whole Turnover principle Selective options for exclusion- LC/ Associates/ Consignments 90% cover Minimum premium of Rs.10,000/- Policy Period - 2 years Buyer wise Credit limit Discretionary limit Monthly declarations with premium No Claim Bonus – yearly 5%; max 50%

25 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Small Exporters Policy Turnover not exceeding Rs.50 Lakhs p.a. Minimum Premium Rs.2000/- Policy Period - one year Higher percentage of cover- Commercial risks 95%; Political risks 100% No Claim bonus Quarterly Declarations

26 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Specific Shipment Policy (SSP) Covering one shipment or One contract Processing fee of Rs.1000/- 80% cover Premium higher than standard premium rates Upfront premium before issue of Policy Commercial / Political risks and L/C comprehensive risks covered Submission of Shipment Statement and realisation report

27 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED SME POLICY For exporters with Export Turnover not exceeding Rs10 Lakhs and registered under MSME Act, 2006 Cover available upto Rs10 lakhs. Annual premium Rs 5,000 and processing fee of Rs1,000 90% cover Maximum claim payable is Rs3 lakhs on any buyer No requirement of monthly declaration of shipments

28 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Benefits For Exporters Protection for account receivable Reduction in Bad debt Improvement in quality of financial planning Enhancement in risk taking capacity Easy access to bank finance on liberal terms

29 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED ECIBS TO BANKS Contract of insurance between bank & ECGC Protects banks against losses in export credit due to - Insolvency of exporter - Protracted default of exporter

30 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED Benefits For Banks Protection For Pecuniary Liabilities Against Funded and Non Funded Credit Facilities To Exporters Enables To Waive Collateral Securities Lesser Capital Deployment requirement.

31 EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED You focus on exports. We cover the You focus on exports. We cover the risks.You focus on exports. We cover the You focus on exports. We cover the risks. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LIMITED In the Service of Exporters and Banks since 1957 Thank You Please visit us at: :


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