Ecgc Overview

1. Overview of Export Credit Guarantee Corporation (ECGC) BUSINESS ASPECTS IN BANKING AND INSURANCE

2. Group Members Shashank Agarwal (2) Harsh Aladia (4) Roven Dsouza (27) Jash Gada (29) Saloni Jain (37) Mili Madani (51)

3. Concept behind creating ECGC Boost export promotion by covering the risk of exporting on credit. Acts as a protection against loss Shift focus on business related activities rather than payment issues.

4. Role of ECGC To promote exports mainly by Protecting Exporters against commercial and political risks in realizing export proceeds Protecting Banks against Risks of Default in export credit Protecting Investors against Political risks in Shareholders’ equity and loan in overseas investments

5. Role of ECGC It provides a wide range of credit risk insurance covers and products to exporters to enable them to withstand losses in export of goods and services in international transactions. It helps exporters in financing their trade transactions by offering guarantees to commercial banks and financial institutions particularly in cases where the exporter has risky payment options and has problems in pre-shipment and post-shipment finances for export transaction. It also provides overseas investment insurance to Indian companies that invest in joint ventures abroad in the form of equity or loan, thereby covering their exposure to risks and enabling them to make foray in international markets.

6. Specific Functions of ECGc Insurance coverage for those exporters who are entering in international trade for the first time after economic liberalizations. First- hand information in export- realted activities, particularly in areas of potentail risk associated with countries and mode of payment in globally changing trade regime and offer such guidance to exporters. Through its network with other credit risk agencies in the world, it publishes information on risk perception on different countries with its own credit ratings Facilitator in obtaining export finance from banks and financial institutions through various guarantees Helps in recovery of bad debts from defaulters by helping them precede legal and diplomatic channels. Database of exporters and and importers and shares creditworthiness. Customized products to exporters.

7. How is it helpful for the exporters? Helps in expansion of sales Protects exporter against bad debts. Credit facilitation and boost borrowing power Stabilize and assure cash flow. Explore and develop new markets. Protection againts corporate insolvency, bankruptcy. Helps in dealing with concerned country’s courts and administration of recovery order.

8. Attributes towards success 5 Regional Offices and 51 Branch Offices All Branches ISO 9001:2000 certified Member of Berne Union(53 members from 42 countries) MOU with GOI Authorized capital of Rs. 1000 crores and paid-up Rs. 900 crores . Alliance with Coface (France), D&B Registred with IRDA Accredited with “ iAAA ” by ICRA GOI instilled confidence by estblishing NEIA(National Export Insurance Account) with corpus of Rs. 2000 crores . Tie-up with NSIC (National Small Industries Corporation) Fulll -fledged Factoring services.

9. Bancassurance

10. Two pillars of Credit Insurance Buyer Underwriting that assesses buyer risks Limit fixed on Buyer Country Underwriting that assesses country risks Country classification

11. Risks covered Buyer risks Bank risks Commercial risks Political risks

12. Buyer Risks Bank Risks Insolvency Protracted Default Contract Repudiation Insolvency of the bank Protected Default

13. War, Civil war, Internal disturbances E xchange transfer blockages/delay New import restrictions, cancellation of import license, etc. Political Risks Diversion of voyage due to war

14. Insolvency of buyer/bank Non acceptance of exported shipment Default of buyer/bank Commercial Risks

15. ECGC Policies Specific Policy For exports under Deferred Payments, Project Exports, Service exports Standard Policy For short term shipments (180 Days) Financial Guarantees to Banks For Giving credit to exporters Special Schemes ( Transfer Guarantee ) To protect Banks Issuing L/C, Confirming L/C, Insurance Cover, Line of Credit, Overseas Investment Insurance & Exchange Fluctuation Risk Insurance

16. Products offered to Exporters Declaration Based Policy Exposure Based Policy Consignment Based Policy Covers for IT Industry

17. Main Policies Shipment Policy Small Exporters Policy Specific Shipment Policy SME Policy

18. Benefits to 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

19. Benefits to Banks Contract of insurance between bank & ECGC Protects banks against losses in export credit due to - Insolvency of exporter - Protracted default of exporter Protection For Pecuniary Liabilities Enables To Waive Collateral Securities Lesser Capital Deployment requirement.

20. Bibliography https ://www.ecgc.in/portal / http ://en.wikipedia.org/wiki/Export_Credit_Guarantee_Corporation_of_India