124796166 ecgc-export-credit-guarantee-corporation

EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD.(ECGC)

UNIVERSITY OF MUMBAI

PROJECT REPORT ON
ECGC

T.Y.B.COM ( B & I ) SEMESTER V
2013-2014

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INTRODUCTION OF ECGC
Export Credit Guarantee Corporation of India Ltd. ( ECGC ) is a Government of India Enterprise which
provides export credit insurance facilities to exporters and banks in India. It functions under the
administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors
comprising representatives of the Government, Reserve Bank of India, banking and insurance and exporting
community. Over the years, it has evolved various export credit risk insurance products to suit the
requirements of Indian exporters and commercial banks. ECGC is the seventh largest credit insurer of the
world in terms of coverage of national exports. The present paid up capital of the Company is Rs. 900 Crores
and the authorized capital is Rs. 1000 Crores.

The Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly owned by the
Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian
exporters and is controlled by the Ministry of Commerce. Government of India had initially set up Export
Risks Insurance Corporation (ERIC) in July 1957. It was transformed into Export Credit and Guarantee
Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee of India in 1983

ECGC is essentially an export promotion organization, seeking to improve the competitive capacity of
Indian exporters by giving them credit insurance covers comparable to those available to their competitors
from most other countries. It keeps its premium rates at the lowest level possible.

Payments for exports are open to risks even at the best of times. The risks have assumed large proportions
today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of
war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring
about the same result. Economic difficulties or balance of payment problems may lead a country to impose
restrictions on either import of certain goods or on transfer of payments for goods imported. In addition, the
exporters have to face commercial risks of insolvency or protracted default of buyers. The commercial risks
of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and
economic uncertainties. 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.

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HISTORY OF ECGC

The need for export promotion had started immediately after Independence in 1947.
In 1953, a proposal for initiation of an export credit guarantee scheme was put forward at a meeting of the
Export Advisory Council. Ministry of Commerce &
Industry analyzed in depth the pros and cons of the Export
Credit Insurance Scheme and a revised draft proposal on
the scheme were presented to the Export Advisory Council
in 1955.

Shri T T Krishnamachari, Finance Minister in Pandit Nehru’s cabinet appointed a special committee under the
Chairmanship of Shri T.C.Kapur to examine the feasibility of setting up an effective organization to provide
insurance against export credit risks. The Government accepted the recommendations of Kapur Committee
and thus the Export Risk Insurance Corporation (ERIC) was registered on 30th July 1957 in Mumbai as a
Private Ltd. Company, entirely state owned, under the Companies Act with an authorized capital of Rs.5
crores and paid up capital of Rs.25 lakhs. Shri Ratilal M Gandhi was the First Chairman and Shri T C Kapur
was the First Managing Director of the Corporation. Shri Morarji Desai, Union Commerce Minister
inaugurated ERIC and the first Policy was issued on 14th October 1957.

After introduction of insurance covers to banks during the period 1962-64, ERIC’s name was changed to
Export Credit & Guarantee Corporation Ltd in 1964.

To bring Indian identify in the name, ECGC was renamed as Export Credit Guarantee Corporation of India
Ltd in the year 1983.

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WHAT DOES ECGC DO?
Provides a range of credit risk insurance covers to exporters against loss in export of
goods and services.

Offers Export Credit Insurance covers to banks and financial institutions to enable
exporters to obtain better facilities from them.

Provides Overseas Investment Insurance to Indian companies investing in joint ventures
abroad in the form of equity or loan.

Offers insurance protection to exporters against payment risks

Provides guidance in export-related activities

Makes available information on different countries with irs own credit ratings

Makes it easy to obtain export finance from banks/financial institutions

Assists exporters in recovering bad debts

Provides information on credit worthiness of overseas buyers.

SOURCE: http://agriexchange.apeda.gov.in/Ready%20Reckoner/ECGC.aspx

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OBJECTIVES

The Corporation has set before itself the following objectives:
1. To encourage and facilitate globalization of India’s trade.
2. To assist Indian exporters in managing their credit risks by providing timely information on worthiness
of the buyers, bankers and the countries.
3. To protect the Indian exporters against unforeseen losses, which may arise due to failure of the buyer,
bank or problems faced by the country of the buyer by providing cost effective credit insurance covers in
the form of Policy, Factoring and Investment Insurance Services comparable to similar covers available to
exporters in other countries.
4. To facilitate availability of adequate bank finance to the Indian exporters by providing surety insurance
covers for bankers at competitive rates.
5. To achieve improved performance in terms of profitability, financial and operational efficiency
indicators and achieve optimum return on investment.
6. To develop world class expertise in credit insurance among employees and ensure continuous
innovation and achieve the highest customer satisfaction by delivering top quality service.
7. To educate the customers by continuous publicity and effective marketing.

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CHAPTER 1. Types of investment
CHAPTER 2. Export credit insurance for exporters
CHAPTER 3. Export credit insurance for banks
CHAPTER 4. Special schemes
CHAPTER 5. Performance of ecgc
CHAPTER 6. Ethics and responsibilities
CHAPTER 7. NEIA and awards
CHAPTER 8. Policies
CHAPTER 9. Recent activities
CHAPTER 10. Strategic planning
CHAPTER 11. Field Visit: Bank Of India
CHAPTER 12. Field Visit: Bank Of Baroda
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HEAD OFFICE
Express Towers, 10th Floor,

National Marketing Division

Nariman Point, Dalamal House, 2nd floor,
Mumbai-400 021.

West Wing, J.B. marg,

Nariman Point
Mumbai 400 021

MANAGEMENT

SOURCE: http://voguesecurity.net/content/managing-ourcontract

BOARD OF DIRECTORS
o

CHAIRMAN CUM MANAGING DIRECTOR

Shri N Shankar
Chairman cum Managing Director
ECGC of India Limited, Mumbai
o

DIRECTORS -GOVT OF INDIA
Shri Arvind Mehta

Dr. Alok Sheel

Joint Secretary

Joint Secretary

Department of Commerce

Department of Economic Affairs,

Ministry of Commerce & Industry,

Ministry of Finance,

Govt. of India,

Govt. of India,

New Delhi

New Delhi

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INSTITUTIONS, COMMERCIAL BANKS & EXPORTERS

Shri V. S. Das

Shri T. C. A. Ranganathan

Executive Director


Reserve Bank of India,

Exim Bank of India,

Mumbai

Mumbai

Shri K. R. Kamath

Shri A K Roy,

Chairman & Managing Director,

Chairman cum Managing Director,

Punjab National Bank,

General Insurance Corporation of India (GIC)

New Delhi

Mumbai.

Shri Hari S. Bhartia

Shri M.Rafeeque Ahmed

Co-Chairman and Managing Director,

President,

M/s Jubilant Life Sciences Ltd.,

FIEO,

New Delhi (Exporter)

New Delhi

Shri Vasant Mehta
M/s V. Rameshchandra & Company,Mumbai (Exporter)

SENIOR EXECUTIVES

Shri N Shankar

Smt.Geetha Muralidhar
Executive Director

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TYPES OF INVESTMENT
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. Any fees payable towards technical knowhow, consultancy or
management services etc., and agreed to be converted into capital will be considered for cover at the
discretion of the Corporation.

Loans:
Loans advanced by way of a formal agreement but not tied to export of goods and supplies are eligible for
cover. Any 'suppliers/buyers' credits and lines of credit extended to support sale of goods or services from
India may be covered under the appropriate insurance schemes of the Corporation and not under investment
insurance.

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. Cover on account of original
investment, retained earnings, dividend receivable and any additional investment will be subject a ceiling of
150 per cent of the original investment calculated as in the proceeding paragraphs. In case of loan, the
insurance will cover the principal as well as interest actually earned.

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Portfolio investment:
Any investment in shares of overseas concerns not related to setting up, development and expansion of
overseas projects would not be eligible for cover under the investment insurance.

Additional investment:
Additional investment can be covered subject to a ceiling of 50 per cent of the original investment. Any
additional investment out of retained earnings should have been made by formal capitalisation and for the
purpose of expansion for development of the enterprise. If the additional investment is made out of retained
profits, which are not eligible for repatriation, such an investment will not be eligible for cover. Initially,
cover is issued for three years. On expiry of the three years it is at the option of the exporter to renew the
cover/review of the JV/WOS by ECGC. The duration of insurance cover shall not normally exceed 15 years
but extension can be given up to 20 years for longer projects. The amount of investment eligible for cover
shall be to the full extent during the first 10 years of cover. Percentage of cover is 90-can be reduced. The
amount of investment eligible for cover will be reduced to 90 per cent, 80 per cent, 70 per cent, 60 per cent
and 50 per cent, respectively, of the original investment during the 11th, 12th, 13th, 14th and 15th years of
insurance. OII provides cover for original investment retained earnings, dividend receivables and additional
investment up to 50 per cent of the original investment. Cover for dividend receivables may not be given in
case of risky countries; cover only for original investment. OII covers only political risks of war,
expropriation and restrictions on remittances.

Premium rate: Base rate: 1 per cent of the investment value. Actual premium rate will depend on the size of
investment,

country

of

investment,

previous

experience

of

the

Importer

etc.

The exporter has to furnish the proposal form along with a fee of 1 per cent of the investment amount subject
to a ceiling of Rs 25,000. If cover is agreed application fee paid shall be adjusted towards premium payable.
In case the application for insurance is rejected, half the fee paid shall be refunded. Premium is taken
upfront. Income from the premium is allocated over the tenor of the cover extended. Installment facility is
provided

by

ECGC

for

collecting

premium

after

analysing

and

approving

the

proposal.

ECGC enters into agreement with the exporters for providing cover mentioning the terms and conditions
along with the maximum liability. The exporters have to submit annual reports about the progress and
working of the projects.

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EXPORT CREDIT INSURANCE FOR EXPORTER



SHORT TERM

A. Turnover Based
Shipment Comprehensive Risk Policy - (SCR)
Shipments (Comprehensive Risks) Policy, commonly known as the Standard
Policy, is the one ideally suited to cover risks in respect of goods exported on
short-term credit, i.e. credit not exceeding 180 days. This policy covers both
commercial and political risks from the date of shipment. It is issued to
exporters whose anticipated export turnover for the next 12 months is more
than Rs.50 lacs. (The appropriate policy for exporters with an anticipated
turnover of Rs.50 lacs or less is the Small Exporter's Policy, described
separately).

Small Exporter Policy - (SEC)
The Small Exporter's Policy is basically the Standard Policy, incorporating
certain improvements in terms of cover, in order to encourage small exporters
to obtain and operate the policy. It is issued to exporters whose anticipated
export turnover for the period of one year does not exceed Rs.50 lacs. The
nature of commercial risks and political risks cover is similar to that of the
Shipment Comprehensive Risk (SCR) or Standard policy.

Specific Shipment Policy - (SSP)
Specific Shipment Policies - Short Term (SSP-ST) provide cover to Indian
exporters against commercial and political risks involved in export of goods
on short-term credit not exceeding 180 days. Exporters can take cover under
these policies for either a shipment or a few shipments to a buyer under a
contract. These policies can be availed of by exporters who do not hold SCR
Policy .

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Services Policy - (SRC)
Where Indian companies conclude contracts with foreign principals for
providing them with technical or professional services, payments due under
the contracts are open to risks similar to those under supply contracts. In order
to give a measure of protection to such exporters of services, ECGC has
introduced the Services Policy.

Export Turnover Policy - (ETP)
Turnover policy is a variation of the standard policy for the benefit of large
exporters who contribute not less than Rs. 10 lacs per annum towards
premium. Therefore all the exporters who will pay a premium of Rs. 10 lacs
in a year are entitled to avail of it.

Export Specific Buyer Policy - (BWP)
Buyer wise Policies - Short Term (BP-ST) provide cover to Indian exporters
against commercial and political risks involved in export of goods on short-term
credit to a particular buyer. All shipments to the buyer in respect of whom the
policy is issued will have to be covered (with a provision to permit exclusion of
shipments under LC). These policies can be availed of by
(i) Exporters who do not hold SCR Policy and
(ii) By exporters having SCR Policy,
In case all the shipments to the buyer in question have been permitted to be excluded from the purview of
the SCR Policy.

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Consignment Exports Policy - (CEP)
Economic liberalization and gradual removal of international barriers for trade and commerce are opening up
various new avenues of export opportunities to Indian exporters of quality
goods. One of the methods being increasingly adopted by Indian exporters is
consignment exports where the goods are shipped and held in stock overseas
ready for sale to overseas ready for sale to overseas buyers, as and when orders
are received. The Consignment Policy cover protects the Indian Exporters from
possible losses when selling goods to ultimate buyers.
There are two policies available for covering consignment export viz;
Consignment Exports (Stock-holding Agent)
Consignment Exports (Global Entity Policy)

B. EXPOSURE BASED

Buyer Exposure Policy - (BEP)
Presently, in the policies offered to exporters premium is charged on the export
turnover, though the Corporation’s exposure on each buyer is controlled
through a system of approval of credit limits on the buyer for covering
commercial risks. While this suits the small and medium exporters, ma ny large
exporters having large number of shipments have been complaining about the
volume of returns to be filed under the policy necessitating the deployment of
their resources for this purpose and also resulting in possible unintentional omissions or commissions in such
reporting, which have an impact on the settlement of claims.
Two types of Exposure policies are offered, viz,
Exposure (Single Buyer) Policy – for covering the risks on a specified buyer and
Exposure (Multi Buyer) Policy – for covering the risks on all buyers.

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IT-Enabled Services Policy - (ITES)
IT-enabled Services Policy is issued to cover the following commercial and
political risks involved in rendering IT-enabled services to a particular
customer:

Commercial Risks:
Insolvency of the customer.
Failure of the customer to make the payment due within a specified period, normally four months from the
due date.
Buyer's failure to accept the services rendered (subject to certain conditions).

Bank risks :
Bankruptcy of L/c opening bank.
Failure of L/c opening bank to make the payment due within a specified period, normally within four
months from the due date (Non-payment due to discrepancies in the document will not be covered).

Political risks:
Imposition of restrictions by the Government of the customer’s country or any Government action which
may block or delay the transfer of payment made by the customer;
War, civil war, revolution or civil disturbances in the customer’s country
New import restrictions or cancellation of a valid import license by authorities in the customer’s country;
Cancellation by the Govt. of India a legally valid and binding contract between the exporter and the
customer.

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Small & Medium Enterprise - (SME)
ECGC introduced a Policy exclusively for the SME sector units in 4th July, 2008. The Policy particularly
provides the SME Sector easy administrative and operational convenience.

Details of SME policy
1. Policy period: 12 months
2. Processing Fees: Rs.1000
3. Credit limit fees: No
4. Declarations: No
5. Premium: Rs5000
6. Maximum Loss Limit: Rs.10 lacs
7. Single Loss Limit: Rs. 3 lacs
8. Report of overdue: more than 60 days from the due date
9. Waiting period: 2 months from the due date or extended Due date
10. Percentage of cover: 90%

This Policy is meant for exporters engaged in manufacturing activities having invested in plant and
machinery or engaged in export of services having invested in equipment as per MSMED Act, 2006. This
Policy can be issued to an exporter qualifying as per the MSMED Act, 2006.
This Policy can be issued to an exporter qualifying as per the MSMED Act, 2006. The exporter desirous of
obtaining the Policy should furnish the certificate issued by the designated authority. (District Industries
Centers)

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EXPORT CREDIT INSURANCE FOR BANKS



SHORT TERM

① Shipment (PC) Pre

Whole Turnover Packing Credit - (WTPC)
A bank or a financial institution dealing in foreign exchange is eligible to obtain this
Whole-turnover Cover for all its accounts.
Period Of Cover: 12 Months

Branch Wise Packing Credit - (BIPC)
A branch of a bank or a financial institution authorized to deal in foreign exchange
Branch-wise Packing Credit Cover in respect of one or more of its exporter clients
been classified as a standard asset and whose Credit is acceptable to ECGC.

Period Of Cover: 12 Months

Export Credit Insurance For Banks ECIB-INPS(Without Any
Exclusion)
Any bank or financial institution who is an authorized dealer in foreign
exchange can obtain the Individual Post-shipment Export Credit Cover in
respect of each of its exporter-clients who is holding the Standard Policy
of ECGC without any exclusion.
Period Of Cover: 12 months

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h


Export Credit Insurance For Banks Individual Post -Shipment (ECIB INPS)– for Non -Policy Holders
respect of each of its exporter-clients who is not holding the Standard
Policy of ECGC.
Period Of Cover:
12 months

ECIB_INPS (Excluding Cover for Shipments Made Against LC)
respect of each of its exporter-clients who is holding the appropriate
Comprehensive Risks Policy of ECGC excluding cover for shipments
made against L/Cs.
Period Of Cover:
12 months

Whole Turnover Post Shipment - (WTPS)
Eligibility
A bank or a financial institution dealing with foreign exchange is eligible to
obtain this Whole-turnover Cover for all its accounts.
Period Of Cover:
12 months
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Export Finance (EF)
Eligibility
Any bank authorized to deal in foreign exchange can obtain the Export
Finance Cover in respect of its exporter-client who has been classified as a
standard asset and whose Credit Rating is acceptable to ECGC
Period Of Cover:
12 months

Individual Export Performance (IN-EP)
For banks holding ECGC Whole-turnover Packing Credit Cover (ECIBWTPC), cover under EP shall be considered for all their standard accounts.
In respect of other banks, it shall be only for standard accounts with
acceptable credit ratings.
Period Of Cover:
As per the period of the bank guarantee. 12 Months

Whole Turnover Export Performance (WT-EP)
For banks holding ECGC Whole-turnover Packing Credit Cover (ECIB-WTPC),
cover under EP shall be considered for all their standard accounts. In respect of
other banks, it shall be only for standard accounts with acceptable credit ratings.
Period Of Cover:
12 months

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Individual Packing Credit - (INPC)
Packing credit cover can be obtained by the bank that provides advances/credit
facilities to the exporters for the purposes of manufacturing, processing, purchasing
and/ or packing of goods granted by banks to exporters who enter into contracts for
export of services or undertaking construction works abroad. The cover provides
protection to the banks against losses suffered on account of non-payment of
advances/credit facilities due to insolvency and/ or default of the borrower exporter.
Period Of Cover:
12 months

Individual Post Shipment-(INPS)
Any bank or financial institution who is an authorized dealer in foreign exchange
that provides post-shipment finance to the exporter by way of purchase,
negotiation or discount of export bills after the shipment has been affected
pertaining to a particular project.
Risks Covered: Protracted default or insolvency of the exporter-client.
Period Of Cover: 12 months

EXPORT CREDIT INSURANCE-EXPORT PERFORMANCE (ECIB-EP)
During execution of projects exporters are required to furnish bonds duly supported by bank guarantees at
various stages starting from bidding, Advance Payment, Due Performance to releasing retention money
which is furnished for completion of defects/warranty period. The exporter furnishes Advance payment bond
for receiving advance payment and due performance bond for assuring due performance of the contract.
Risks Covered
Insolvency of Borrower
Protracted Default of Borrower

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Export Finance (Overseas Lending) Guarantee
If a bank financing an overseas project provides a foreign currency loan to the
contractor, it can protect itself from the risk of non-payment by the contractor by
obtaining Export Finance (Overseas Lending) Guarantee.

ECIB Cash Flow Deficit Financing
The bank financing an overseas project may be required to extend loan to the
contractor to overcome cash flow deficits and ensure smooth and timely execution
of the project. Such loans can also be granted to the contractors for execution of
deemed export projects in India. The cover provides protection to the banks against
losses that bank may suffer due to insolvency and default of the borrower.

Buyer's Credit Cover
Insurance Cover for Buyer's Credit And Line of Credit.
Buyer's Credit is a credit extended by a bank in India to an overseas buyer enabling
the buyer to pay for machinery and equipment that he may be importing from India
for a specific project. A Line of Credit is a credit extended by a bank in India to an
overseas bank, institution or government for the purpose of facilitating import of a
variety of listed goods from India into the overseas country. A number of importers
in the overseas country may be importing the goods under one Line of Credit.

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SPECIAL SCHEMES
Transfer Guarantee
When a bank in India adds its confirmation to a foreign Letter of Credit, it binds
itself to honor the drafts drawn by the beneficiary of the Letter of Credit without any
recourse to him provided such drafts are drawn strictly in accordance with the terms
of the Letter of Credit. The confirming bank will suffer a loss if the foreign bank
fails to reimburse it with the amount paid to the exporter. This may happen due to
the insolvency or default of the opening bank 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. The Transfer Guarantee seeks to safeguard banks in India
against losses arising out of such risks.
Transfer Guarantee is issued, at the option of the bank to cover either political risks alone, or both political
and commercial risks. Loss due to political risks is covered up to 90% and loss due to commercial risks up to
75%.

Overseas Investment Insurance

ECGC has evolved a scheme to provide protection for Indian Investments abroad. 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.
The investment may be either in cash or in the form of export of Indian capital goods
and services. The cover would be available for the original investment together with
annual dividends or interest receivable. The risks of war, expropriation and restriction
on remittances are covered under the scheme. As the investor would be having a hand in
the management of the joint venture, no cover for commercial risks would be provided
under the scheme.

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Customer Specific Policy Cover
In order to cater to the specific need for export credit insurance cover, of reputed
large value exporters which otherwise could not be fully addressed under any one
of standard products , the customer specific policies have been introduced and are
issued to large exporters on a selective basis on the merits respective requests for
such cover. Normally such policies are issued without changing the basic risk
cover profile of the export transaction. Some of the features of customer specific policies are as under.

Policies can be issued combining feature of more than one standard type(Off the shelf) policies;
Policies are issued with the base cover of an appropriate standard policy with added feature from other
standard policies if required;
Customer specific policies are considered only in respect of cases where anticipated annual premium is more
than Rs.10 lacs;
The customers policies are issued in line the credit insurance covers approved by IRDA.

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PERFORMANCE OF ECGC DURING LAST FISCAL

Last year's performance has been reasonably good.

Premium income actually crossed Rs 1,000 crore; rose to Rs 1,005 crore from Rs 885 crore.
Correspondingly claims payment went up to Rs 713 crore from Rs 621 crore.
Recovery has been higher at Rs 169 crore against Rs 137 crore. Because of the current global
financial situation claims paid will be higher.
You see, we are in the service of promoting exports. Our business has two components: one,
direct insurance cover to exporters where we cover risk on the overseas buyers. The other is
the cover to banks in India which provide credit to exporters.
This business has been higher last year with the premium touching Rs 630 crore from Rs 533
crore.

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RECENT DEVELOPMENT

SOURCE:http://www.google.co.in/imgres?q=growing+business
Largest Policy – short term Rs.450 crores

Largest database on buyers 8 lakhs
Largest credit limit Rs.80 Crore

Largest claim paid Rs.120 crores
Quickest claim paid 2 days

Highest compensation-Iraq Rs 788 Crores[citation needed]
on 31.3.2012 ECGC has achieved a magical milestone of Rs.1000 Crores of premium income

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CODE OF ETHICS

Ethical codes are adopted by organizations to assist members in understanding the difference between 'right'
and 'wrong' and in applying that understanding to their decisions. An ethical code generally implies
documents at three levels:
1.codes of business ethics,
2.codes of conduct for employees, and
3.codes of professional practice.
A code of business ethics often focuses on social issues. It may set out general principles about
an organization's beliefs on matters such as mission, quality, privacy, or the environment. It may
delineate proper procedures to determine whether a violation of the code of ethics has occurred and,
if so, what remedies should be imposed.

SOURCE:http://www.google.com/imgres?q=CODE+OF+ETHICS

 This code shall be called the Code of Ethics and Business Conduct for ECGC employees
 It shall be applicable to all employees of ECGC.
 This Code supplements the various laws and regulations applicable to ECGC, as also its internal
policies, guidelines and CDA (Conduct, Discipline and Appeal) Rules, compliance with which is
mandatory and violations punishable as prescribed.

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CORPORATE SOCIAL RESPONSIBILITY (CSR)

SOURCE:http://www.google.com/imgres?q=corporate+social+responsibility
As per the MOU signed with Ministry of Commerce, Govt. of India for the year 2011-12,ECGC has
undertaken following three projects at M Ward, Mankhurd, Mumbai with the help of National Corporate
Social Responsibility Hub ( NCSRH) under administrative control of Tata Institute of Social Science,
( TISS ) ,Chembur, Mumbai.
1. Empowerment of Women
2. Scholarship to Meritorious Students from underprivileged sections
3. Support to export oriented Skill Development Centre
The above projects will be completed by March’2013.

CSR Date: 6/21/2012
Under the Corporate Social Responsibility (CSR) initiatives, ECGC had released an amount of Rs.6.50,500
on 21.4.2011 for construction of first floor to Nirdhar Pratisthan , Mumbai, a registered Charitable Trust
under Mumbai Public Trust Act 1950 which provides permanent home care service for mentally challenged
persons.

CSR DATE: 4/24/2011
Under Corporate Social Responsibility (CSR) ECGC has donated school bus to Matru Seva Sangh's,
Nadanvan School, Nagpur (School for Mentally challenged children) on 01/04/2011. For details, please

CSR DATE: 4/1/2011
Under the Corporate Social Responsibility (CSR) ECGC has donated an amount of Rs.28.45 lacs on
28.03.2011 to Priya Darshani Jan Kalyan Samiti , Gyanpur, Dist. Bhadohi. An NGO providing education to
the children of Carpet weavers.

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37


NEIA?( NATIONAL EXPORT INSURANCE ACCOUNT)

SOURCE:http://www.google.com/imgres?q=india+national+export+insurance+images

The National Export Insurance Account has been set up by the Government of India (GOI) and operated by
ECGC to provide adequate credit insurance cover to protect long and medium term exporters against both,
political and commercial risks of the overseas country and the buyer/bank concerned. The NEIA trust also
provides covers to banks for Buyer’s Credit transactions which facilitates foreign buyer to pay for project
exports from India.

Indian companies secure overseas projects against stiff international competition and needs adequate credit
insurance to enhance their competitiveness. Projects are required to be undertaken, specifically due to the
long term economic interest and political relationship of India with importing country. Given India’s long
term economic and political interests with the concerned country, it is crucial that ability of Indian exporters
undertaking such contracts is not hampered by the inability to obtain credit insurance cover. With this view
GOI has set up the NEIA.

ECGC, a Govt. of India enterprise under the aegis of the Ministry of Commerce, apart from insuring credit
risks under short term exports also provides credit insurance cover to Medium and Long term exporters.
However, at times, its own limitations make it difficult for ECGC to cover such risks on purely commercial
considerations, taking into account the long repayment period, the large value of the contracts and the
difficult economic and political conditions of the country, coupled with the fact that reinsurance cover is
generally not available in such cases.

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AWARDS & RECOGNITIONS

ECGC has been conferred the First Prize for the year 2010-11 for
excellent implementation of Rajbhasha by Ministry of Commerce.
Shri N.Shankar, CMD of ECGC has received the award from Shri
Jyotiraditya Scindia, Hon'ble State Minister of Commerce &
Industry in the Hindi Advisory Committee meeting held on 7
February 2012.

ECGC has been conferred Indira Gandhi Award for Rajbhasha
(2nd prize) for excellent implementation of Rajbhasha by Ministry
of Home affairs. Shri Arvind Mehta, CMD of ECGC has received
the award from Hon'ble Smt. Pratibha Patil, President of India on
14.09.2011 at a function held at Vigyan Bhawan, New Delhi.

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40


RBI POLICIES FOR ECGC

SOURCE:http://www.google.co.in/imgres?q=RBI+POLICIES

RBI

authories

banks

to

write

off

GRs

on

settlemant

of

claim

by

ECGC
1. It has now been decided that Authorised Dealers shall, on an application received from the exporter
supported by a documentary evidence from the ECGC confirming that the claim in respect of the
outstanding bills has been settled by them, write off the relative export bills and delete them from the XOS
statement. Such write-off will not be restricted to the limit of 10 per cent indicated in paragraph C.18(b) of
the circular ibid.

2. It is clarified that the claims settled in rupees by ECGC should not be construed as export realisation in
foreign exchange and claim amount should not be allowed to be credited to Exchange Earner’s Foreign
Currency Account maintained in terms of Regulation 4 of FEMA Notification No.FEMA 10/2000-RB dated
May 3, 2000.

3. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the
Foreign Exchange Management Act, 1999 (42 of 1999).

41


CUSTOMER GRIEVANCE REDRESSAL POLICY

[Pursuant to Board Resolution No. 371/S1-01 dated 26th November 2010]
SOURCE : http://www.google.co.in/imgres?q=customer+grievance+redressal+of+ECGC

The Grievance redressal mechanism of an organization is the gauge to measure its efficiency and
effectiveness as it provides important feedback on the working of the Organization.
The main purpose of a Grievance Policy is to place an appropriate mechanism whereby the Customer who
believe(s) that he/ she has been wronged by any act of the
Company is afforded a fair opportunity to redress his/ her Grievance.
We have already forwarded the relevant IRDA Guidelines to all the BMs and H. O. Ds on 9th instant.
Objectives
The objectives of the Grievance Redressal Policy are:
(a) To develop an organizational framework to promptly address and resolve customer
Grievances fairly and equitability;
(b) To provide enhanced level of customer satisfaction;
(c) To provide easy accessibility to the customer for an immediate Grievance redressal.
(d) To educate the customers about their responsibilities to access benefits due under the policies;
(e) To ensure that the customers are treated fairly at all times;
(f) To identify systemic flaws in the operational functions of the organization and products suggesting
corrective measures;
(g) To put in place a monitoring mechanism to oversee the functioning of the Grievance Redressal Policy.
42


PROCEDURE FOR POLICY INSURANCE

1. There are application forms with carious Regional Offices of the ECGC which are to be submitted to
the nearest Regional Office with a policy fee which may be subject to changes.
2. In case of shipment policies, the exporter undertakes to submit monthly returns in respect of
shipments made and the progress of the contractual terms.
3. In case of contract policy, the exporter undertakes to send a declaration monthly on the contract
entered into during the preceding month, in addition to shipment made over that period
4. The ECGC should also get a monthly statement of all overdue payment so that it can take steps to
avoid possible losses.
5. The ECGC may charge additionally in case they require the bank reports on the foreign buyer.

RISKS NOT COVERED UNDER POLICY
ECGC, however, does not cover risks of loss due to:
a. Commercial disputes, including quality disputes raised by the buyer unless the exporter obtains a decree
from a competent court of law in buyer's country in his favour.
b. Causes inherent in the nature of goods:
c. Buyer's failure to obtain import or exchange authorization from the appropriate authority:
d. Insolvency or default of any agent of the exporter or of the collecting banks:.
e. Loss or damage to goods which can be covered by general insurers:
f. Fluctuations in exchange rates (except under Exchange Fluctuation Risk over Schemes)and
g. Failure of the exporter to fulfill the term of contract or negligence on his part.

43


44


RECENT ACTIVITIES IN ECGC

Inauguration of split Bank and Exporter Branches at Tirupur/ Hyderabad on 2/7/2012

Inauguration of Faridabad Branch on3/8/2012

Revised Processing Fee structure for the customers from 01st July, 2012.

New Website of ECGC( www.ECGC.in ) launched: The new website of ECGC has been launched on
21.6.2012 by Shri V S Das, Executive Director , Reserve Bank of India in the presence of CMD and
Senior Management of ECGC

ECGC pays claim of Rs.67.40 crs to Punjab National Bank

ECGC enters into an alliance with EKN

ECGC gets First Prize for the year 2010-2011 for excellent implementation of Rajbhasha

Recruitment of Probationary Executive Officers 2011-2012

45


AT PRESENT INSTITUTIONS TAKING CREDIT LOANS FROM ECGC

Following are the sectors taking credit loans from ECGC.

 Currently,

public sector banks forms around

70% of the export financing while

 foreign and private lenders form around 15%
each.

 ECGC presently covers around 70% of total short term export finance disbursed by
banks in India.

 Public sector banks used to take more credit loans as compare to private sector banks.

 Individual exporters also takes credit loans.

 In

olden days the exporters was not knowing more about the ecgc at that time the

number of institutions taking credit loans was not more.

46


47


STRATEGIC PLANNING is an organization's process of defining its strategy, or direction, and
making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the
organization, it is necessary to understand its current position and the possible avenues through which it can
pursue a particular course of action

The key components of 'strategic planning' include an understanding of the firm's
vision & mission.

MISSIONS
It Defines the fundamental purpose of an organization or an
enterprise, succinctly describing why it exists and what it does to
achieve its vision. For example, the charity above might have a
mission statement as "providing jobs for the homeless and
unemployed".
The mission of ECGC is to support the Indian Export Industry by providing cost effective insurance and
trade related services to meet the growing needs of Indian export market by optimal utilization of available
resources.

VISION
It outlines what the organization wants to be, or how it
wants the world in which it operates to be (an "idealised"
view of the world). It is a long-term view and
concentrates on the future. It can be emotive and is a
source of inspiration. For example, a charity working with
the poor might have a vision statement which reads "A
World without Poverty."
The vision of Export Credit Guarantee Corporation of India Ltd. is to excel in providing export credit
insurance and trade related services.

48


49


Many organizations are affiliated to ECGC and support its services. Export credit guarantee
corporation has signed the corporate agency agreements with many banks out of which I
have selected following banks:

FIELD VISIT OF BANK OF INDIA

BANK OF INDIA

Bank of India (BoI) is a state-owned commercial bank
with headquarters in Mumbai. Government-owned since
nationalization in 1969, It is India's 4th largest PSU
bank, after State Bank of India, Punjab National Bank
and Bank of Baroda. It has 4157 branches as on
21/04/2012, including 29 branches outside India, and
about 1679 ATMs. BoI is a founder member of SWIFT
(Society for Worldwide Inter Bank Financial
Telecommunications), which facilitates provision of
cost-effective financial processing and communication
services. The Bank completed its first one hundred years
of operations on 7 September 2006.
BOI ranked 1st among the nationalised banks as Indias most trusted service brand 2011 ET Nielsen survey.

HISTORY
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The
Bank was under private ownership and control till July 1969 when it was nationalised along with 13 other
banks.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has
made a rapid growth over the years and blossomed into a mighty institution with a strong national presence
and sizable international operations. In business volume, the Bank occupies a premier position among the
nationalised banks.

50


Bank of India is affiliated with ECGC it provides following credit on behalf of ECGC
Pre-shipment Credit
Post shipment Credit

Following given is the interest rate chart of Bank Of India

Interest Rates (per
annum)
1

Pre-shipment Credit
(a) Upto 180 days

(b) Beyond 180 days and
upto 360 days

2

Not exceeding 200
basis points over
LIBOR/ EURO
LIBOR/ EURIBOR
Rate of initial period of
180 days prevailing at
the time of extension
plus 200 bps

Post-shipment Credit
(a) On demand bills for
Not exceeding 200
transit period (as specified basis points over
by FEDAI)
LIBOR/ EURO
LIBOR/ EURIBOR
(b) Usance bills (for total Not exceeding 200
period comprising usance basis points over
period of export bills,
LIBOR/ EURO
transit period as specified LIBOR/ EURIBOR
by FEDAI and grace
period as wherever
applicable)
Upto 6 months from the
date of shipment
(c)Export bills (demand
Rate for 2(b) above plus
or usance) realised after
200 basis points
due date but upto date of
crystallization

51


Following is the chart on rupee export credit other than specified sectors

Category of Export Credit
Rates
w.e.f.
01.07.10
Large
Corporate

(1)
1. Pre-shipment Credit
a) i) Period upto 180 days
ii) Beyond 180 days and upto
270 days
b)Against incentives receivables
from Govt. covered by ECGC
Gtee upto 90 days
2. Post-shipment Credit
a) On Demand Bills for transit
period (as specified by FEDAI)
Usance Bills *

Rates
w.e.f.
01.07.10
Mid
Corporate

9.25
9.25

9.50
9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

9.25

9.50

Base
Rate+
Credit
Risk
Spread
Base
Rate
+5.00%
Base
Rate
+5.00%

Base
Rate +
Credit
Risk
Spread
Base
Rate
+5.00%
Base
Rate
+5.00%

1. Upto 90 days
ii) Beyond 90 days upto 6
months from the date of
shipment
iii) Upto 365 days for exporters
under Gold Card Scheme
c) Against incentive receivable
from Govt. covered by ECGC
Gtee (upto 90 days)
d)Against undrawn balances
(upto 90 days)
e) Against retention money (for
supplies portion only) payable
within 1 year from the date of
shipment (upto 90 days)
3. Deferred Credit – For the
period beyond 180 days

4. Export Credit Not
otherwise Specified (ECNOS)
a) Pre-shipment Credit b) Post
Shipment Credit

52


53


FIELD VISIT OF BANK OF BARODA

BANK OF BARODA

Bank of Baroda (BoB) is the highest profit-making
public sector undertaking (PSU) bank in India and the
second largest PSU bank in terms of number of total
business in India. It is the country's first largest public
sector lender in terms of annual profit. Bob is ranked
715 on Forbes Global 2000 list. BoB has total assets in
excess of Rs. 3.58 lakh crores, or Rs. 3,583 billion, a
network of 4007 branches (out of which 3914
branches are in India) and offices, and over 2000
ATMs. It plans to open 400 new branches in the
coming year. It offers a wide range of banking
products and financial services to corporate and retail
customers through its delivery channels and through its
specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management.
Its total global business was Rs. 6,722.48 billion as of 31 March 2012. Its headquarter is in Baroda and
corporate headquarter is in Bandra Kurla Complex Mumbai.

HISTORY
The Maharaja of Baroda, Sir Sayajirao Gaekwad III, Peshwa of the Maratha Empire, founded the bank on
20 July 1908 in the princely state of Baroda, in Gujarat. Two years later, BoB established its first branch in
Ahmedabad. The bank grew domestically, until after World War II. Then in 1953 it crossed the Indian
Ocean to serve the communities of Indians in Kenya and Indians in Uganda by establishing a branch each in
Mombasa and Kampala. The next year it opened a second branch in Kenya, in Nairobi, and in 1956 it
opened a branch in Dar-es-Salaam. Then in 1957 BoB took a giant step abroad by establishing a branch in
London. London was the center of the British Commonwealth and the most important international banking
centre. 1959 saw BoB complete its first domestic acquisition when it took over Hind Bank.
The bank, along with 13 other major commercial banks of India, was nationalised on 19 July 1969, by the
government of India.

INTERNATIONAL PRESENCE OF BOB
In its international expansion, the Bank of Baroda followed the Indian diaspora, especially that of Gujaratis.
The Bank has 93 branches/offices in 24 countries including 55 branches/offices of the bank, 36 branches of
its 8 subsidiaries and 2 representative offices in Thailand and Australia. The Bank of Baroda has a joint
venture in Zambia with 16 branches.
Among the Bank of Baroda’s overseas branches are ones in the world’s major financial centers (e.g., New
York, London, Dubai, Hong Kong, Brussels and Singapore), as well as a number in other countries. The
bank is engaged in retail banking via the branches of subsidiaries in Botswana, Guyana, Kenya, Tanzania,
and Uganda. The bank plans to upgrade its representative office in Australia to a branch and set up a joint
venture commercial bank in Malaysia. It has a large presence in Mauritius with about nine branches spread
out in the country.
54


Export Finance
Bank of Baroda, being India’s International bank is very active in Export promotion. With the operating
network of our own branches/offices in 25 countries and worldwide correspondent relationships, our clients
enjoy comforts in transacting international business. Besides the world-class services, we also provide
Export Finance to Exporters at concessive terms to facilitate their competing in the global market.
Our Export Finance is made available at pre shipment and post shipment stage to exporters in various types
of credit:

Pre-Shipment Finance:
Packing Credit in Rupees.
Running Packing Credit in Rupees.
Packing Credit in Foreign Currency.
Letters of credit/Guarantees for procurement of materials for export.

Post-Shipment Finance:
Purchase of Export Documents under confirmed order.
Discounting of Export documents under L/C or confirmed order.
Negotiation of documents under L/C.
Post shipment demand Loans against Export Bills sent for collection.
Export Bills purchase / discounting in Foreign Currency.
Advance against export incentive receivables.

55


56


LITERATURE REVIEW

institution,

Over the years, it has come a long way in all its operational matrics too as a commercial
understanding the market, changing requirements of Indian exporters and making its services

available to exporters across the country.


More importantly, as a non-life insurer, it also could successfully transform itself into a

modern insurance firm with niche base, meeting all regulatory compliances and requirements.



“We strive to stay ourselves strong, aim to grow faster and improve our overall efficiency

level,” says Mr Shankar, who has long years of experience in export credit business, earlier being Executive
Director of Exim Bank, one of India’s largest export promotion institutions. Incidentally, the government has
also been supportive and meeting its demands on time, he points out.


ECGC always tries to understand the changing needs of various classes of exporters. It has,

time to time, developed various export credit risk insurance products to meet the requirements of Indian
exporters and commercial lenders, he points out.



ECGC has strong and well-defined systems and processes in place. Major strength of

ECGC, he says, lies in its committed and loyal workforce.


Officers are constantly trained on various aspects of business through brain-storming

sessions. Seminars, organized by it for its workforce, are mostly participative in nature for giving better
results, says Mr Shankar.



Sometimes they are also sent for programmes organized by out-side agencies, besides its

own programmes with an aim to help them gain better feedback and increase their knowledge of the area
they handle. Staff attrition is very low, which is major HR advantage for it.


At ECGC business review is a continuous process. ECGC, through its long experience and

first-hand knowledge of the country risk, has developed an operational model with clear guidelines.

57



Recently, ECGC also has started working on its own credit rating models for overseas

buyers of Indian goods, which will also enable Indian exporters to understand the strength of the overseas
buyers.



It has prepared models of open cover and restricted cover lists. Under the open cover its

branches can decide on the exposure limit of buyers as per delegated powers. The exposure limit is restricted
in the case of restricted cover countries. This operational model, while protecting the interest of the
institution, sends a kind of message to exporters about the strength of their overseas markets.


Many times, it is difficult to get information about overseas buyers. Sometimes, ECGC has

only their addresses. In many counties, it depends on outside agency for information.



For recovery it totally depends on overseas agents. Though ECGC is an institution dealing

with exporters’ interest and foreign clients of Indian exporters, it does not have a foreign office.


“Now we are planning to open offices abroad,” he says. Establishment of foreign offices

will enable it to go for more effective recovery process and understand the market better.



At the same time, it will also enlarge the panel of agencies who supply rating reports on

clients.


In every sense, ECGC is a dynamic organization with a lean structure and high level of

manpower productivity.



With roughly Rs 1.75 crore per employee premium income and clean balance sheet, ECGC

also stands out to be a dynamic commercial organization that reaches its clients through own network and
also through alternate channels.


“Now we have branches/offices in all big cities and SME clusters across the country” says

Mr Shankar, who has many plans for the institution’s long term growth.



Against IRDA prescribed solvency margin of 1.5 per cent, it maintains 10.5 per cent,

another sign of its strength as an insurer.
58


1. CONCLUSION
2. SUGGESTIONS

59


CONCLUSION



Export Credit Guarantee Corporation of India (ECGC) is a government of

India enterprise administered by the Ministry of Commerce and Industry.


Export Credit Guarantee Corporation of India was setup to enable smoother

functioning of the exporter in India by eliminating risks associated with payments generating
from other countries.


Being essentially an export promotion organization, it functions under the

administrative control of the Ministry of Commerce & Industry, Department of Commerce,
Government of India.


It is managed by a Board of Directors comprising representatives of the

Government, Reserve Bank of India, banking, insurance and exporting community.


The insurance cover provided by Export Credit Guarantee Corporation of

India also helps the exporters in getting better access to credit facilities from financial
institutions.


Export Credit Guarantee Corporation of India is the fifth largest credit

insurance company which deals with exports of any country.


ECGC provides protection against non-payment by the importers. Because of

this insurance cover, financial institutions are better placed to lend and provide larger credit
to the exporters.


The company also provides credit ratings and shares information on different

countries and the risks associated with doing business in those countries.

60




ECGC recognizes that customer’s expectations/ requirements/ grievances can

be better appreciated through personal interaction with customers by ECGC officials.



Structured customer meets will give the message to the customers that ECGC

cares for them and values their feedback/ suggestions for improvement in customer service.


ECGC is the fifth largest credit insurer of the world in terms of coverage of

national exports. The present paid-up capital of the company is Rs.800 crores and authorized
capital Rs.1000 crores.

SUGGESTIONS



ECGC shall take all efforts to abide by and enforce its citizen charter in all its

operations and shall respect and enforce policyholders rights as enshrined in the relevant
IRDA document.



Complaints arising on account of lack of awareness among customers about

ECGC services may be avoided through customer interactions and customer awareness
programs.

61


62


QUESTIONNAIRE

1. When this bank was affiliated with ECGC?
2. What type of export credit is provides?
3. What is the interest rate on credit?
4. How the officers are trained regarding export finance?
5. Has the global economic slowdown negatively affected in your business?
6. What are your future plans for export promotion?
7. Is there any effect of sub-prime crisis on your performance?
8. How is your experience with ECGC?
9. Is there any foreign office of this bank for export promotion?
10. How is the growth of bank relating to export?
11. What are your future plans in India as well as overseas?
12. What is your experience in various other countries?
13. Are there any RBI guidelines which you have to follow?
14. How ECGC helps to economy of India?
15. How much is your contribution in ecgc export credit?

63


ARTICLE
News on: Construction of ECGC corporate office and residential accommodation at Andheri, Mumbai.

SOURCE: http://www.google.com/imgres?q=construction+of+ecgc+office
1600&bih=805&tbm=isch&tbnid=Ux0NrxctraPlPM:&imgrefurl=http://tenders.indiamart.com/details/573
008822/&imgurl=http://2.imimg.com/data2/PS/IM/HTT-342/342_2011-0328_10.jpg&w=655&h=416&ei=nnVDUJnxIcHqrAeE1IDQBA&zoom=1&iact=hc&vpx=361&vpy=155&d
ur=1142&hovh=179&hovw=282&tx=162&ty=97&sig=109382907097758228760&page=1&tbnh=115&t
bnw=181&start=0&ndsp=29&ved=1t:429,r:1,s:0,i:75

64


1. BIBLIOGRAPHY
2. WEBLIOGRAPHY

65


BIBLIOGRAPHY

PRIMARY DATA
Bank of India: - Ambernath Branch
Bank of Baroda: - Badlapur Branch

SECONDARY DATA
3. INTERNATIONAL FINANCE
Author : V.A. Avadhani
4. ECONOSTER-Exporter’s credible lifeline
Author : N. Shankar

WEBLIOGRAPHY
http://www.ecgcindia.in/en/Pages/ECGCAPHome.aspx
http://en.wikipedia.org/wiki/Export_Credit_Guarantee_Corporation_of_I
ndia

http://www.scribd.com/doc/34200662/65/ROLE-OF-EXPORT-CREDITGUARANTEE-CORPORATION-ECGC
http://agriexchange.apeda.gov.in/Ready%20Reckoner/ECGC.aspx
http://www.thehindubusinessline.com/industry-and-economy/banking/article3487002.ece

66

124796166 ecgc-export-credit-guarantee-corporation

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