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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Export Credit Guarantee Corporation of India – Wikipedia
These policies are issued separately for schemme specific contract, and cover risks normally from the date of contract. It is, therefore, the appropriate policy for an exporter to take if the payments are open to both commercial and political risks. GST payable on sale of animal oil, waxes, fats, vegetable oil etc.
The different policies are: The ecvc of insurance cover shall not normally exceed 15 year but extension can be given upto 20 years for longer Projects. Transfer Guarantee indemnifies the insured bank for any loss due to the insolvency or default of the foreign bank opening Letter of Credit 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.
Where the Commercial risks are absent, e. Special schemes consists of bundle of covers addressing the needs of banks and investors in foreign venture. Ecggc these schemes are recommended to those specific audiences.
Adequate security should be obtained in the form of schmee guarantee or bank guarantee. It is managed by an Asset Management Company comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community.
The risks of war, expropriation and restriction on remittances are covered under the schemes. Specific Contract Political Risks Policy.
The distinguishing features of a Construction Contract are that a the contractor keeps raising bills periodically throughout the Contract period for the value of work done between one billing period and another ; b to be eligible for payment, the bills have to be certified by a consultant or supervisor engaged by the Employer for the purpose and c that, unlike bills of exchange raised by suppliers of goods, the bill raised by the contractor do not represent conclusive evidence of debt but are subject to payment in terms of the Contract which may provide, among other things, for penalties or adjustments on various counts.
The Exchange Fluctuation Risk: The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. The exporters have to submit annual report about the progress and working of the Project. How does Letter of Credit work?
Specific Shipments Comprehensive Risks Policy provides cover against all the risks covered under the Standard Policy for shipments to be made under the contract in question For details of risks, click here. Cover can be obtained from the date of bidding right up to the final instalment. Normally these contracts are of very high value and involve longer credit period. Installment facility is provided by ECGC for collecting premium after analyzing and approving the proposal. 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.
ECGC ltd now offers various products for the exporters and bankers. In case of loan, the insurance will cover the principal as well as interest actually earned.
For investment in shceme country to qualify for investment insurance, there should preferably be a bilateral agreement protecting investment of one country in the other. 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. If the loss exceeds 2 percent, ECGC will make good the portion of loss in excess of 2 percent but not exceeding 35 percent of the reference rate.
It would be necessary for the interested persons to consult ECGC for ascertaining specific terms of cover. An exporter who desires to quote for a foreign tender may have to furnish a bank guarantee for the bid bond. Construction Works Policy Construction Works Policy is designed to provide cover to an Indian contractor who executes a civil construction job abroad. Besides, the Contract value itself may only be an estimate of the work to be done, since the Contract may provide for cost escalation, variation contracts, additional contracts, etc.
Export Credit Guarantee Corporation of India
Factors weighing approval of Buyers Credit proposals are: Premium rates for Contract Policies will be higher than that for Shipment Policies. The rate of premium is 40 paise per Rs.
The cover scbeme be available for the original investment together with annual dividends or interest receivable. ECGC enters into agreement with the exporters for providing cover mentioning the terms and conditions alongwith the maximum liability.