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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Premium is taken up front. In case, the application for insurance is rejected, half the fee paid shall be refunded.
Thereafter, the annual premium will have to be paid in such a manner that premium for two years ahead is always kept paid to the Corporation. Interest will be charged for the instalment facility. In addition to the policy covers, which are issued to exporters, ECGC also extends its guarantee support to banks in India against both funded and nonfunded facilities extended to Project Exporters. Amounts insured shall be reduced progressively in the last five years of the insurance period.
When can an exporter release bill of lading from shipping company? It is, therefore, the appropriate policy for an exporter to take if the payments are open to both commercial and political risks.
Any investment made by way of equity capital or untied loan for the purpose of setting up or expansion of overseas projects will be eligible for cover under investment insurance. In addition, the exporters have to face commercial risks of insolvency or protracted THE default of buyers. Factors weighing approval of Buyers Credit proposals are: 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.
The exporter has to furnish proposal form alongwith fee of Rs. For investment in any country to qualify for investment insurance, there should preferably be a bilateral agreement protecting investment of one country in the other.
If the terms and conditions of the contract undergo any change subsequently, ECGC should be informed of the same, so that changes, if any, in the applicable premium rates can be ascertained. Specific Contract Policy which also can be for comprehensive or political risks differs from Shipments Policy in that the former provides the exporter not only with the post-shipment cover like the zcheme but also with wcgc pre-shipment cover from the date of contract.
The cover would be available for the original investment together with annual dividends or interest receivable. Specific Shipments Political Risks Policy; 3. For covering construction contract, a Construction Works policy can be obtained. The insurance is provided by ECGC with the objective of enabling exporters to obtain the required guarantee facility from banks on easy terms. The types of guarantees issued by Schemme bank are:.
Special Schemes – ECGC
Export credit insurance is designed to protect exporters from the consequences of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss. ECGC provides for an insurance cover named as Construction Works Policy to provide cover to an Indian contractor who executes a civil construction job abroad.
No further premium is payable if the exporter is not declared successful in the bid.
There are cases where even government or central bank guarantees fcgc available safeguarding payments. The risks of war, expropriation and restriction on remittances are covered under the schemes. GST rate on preserved meat, fish, crustaceans etc.
Special Schemes of ECGC
Where the contract provides for supply and erection of a complete plant, the first instalment may fall due after six months from the date of commissioning of the plant. Sccheme the loss exceeds 2 percent, ECGC will make good the csheme of loss in excess of 2 eccgc but not exceeding 35 percent of the reference rate. For investment in any country to qualify for investment insurance, there should preferably be a bilateral agreement protecting investment of one country in the other.
Ecc 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.
The investment may be either in cash or in the form of export of Indian capital goods and services. Cover for dividend receivables may not be given in case of risky countries; cover only for original investment. In order to protect such exporters ECGC has the following types of covers. Specific Contract Comprehensive Risks Policy; and 4. Initially cover is issued for 3 years.
Any additional investment out of retained earnings should have been made by formal capitalization and for the purpose of expansion for development of the enterprise. The loss or gain within a range of 2 percent of the reference rate will go to the exporter’s account. Ten percent of the total premium payable and premium for the first two years should be paid at the time of issue of sche,e Policy.
Export Credit Guarantee Corporation of India
The confirming bank will suffer a loss if the foreign bank fails to reimburse it with the amount paid to the exporter. These policies are issued separately for each specific contract, and cover risks zcheme from the date of contract. Two types of sceme have been evolved to cover contracts with i Government buyers and ii Private buyers. This scheme provides protection for Indian Investments abroad. Longer credit period may be approved only in the case of exceptionally large Projects if the circumstances of the case justify it.
Views Read Edit View history. It is, therefore, important that the Contractor ensures that the Contract is well drafted to provide clarity of the obligations of the two parties and for resolution of disputes that may arise in the course of execution of the contract.