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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This also can be either for political or comprehensive risks. How does First Appraisement system of import customs clearance procedures work? Only post-award approval is required to be taken. It covers exchange fluctuation risk of exporters of capital goods, civil engineering contractors and consultants who may have to receive foreign echc payments over a period of years for ecgf exports, construction works or services.
The risks of war, expropriation and restriction on remittances are covered under the scheme.
A coup or an insurrection may also bring about the same result. Terms of payment Schene be eligible for cover under specific policies, the terms of payment for the export contracts should be in line with customary practices in the international markets. All articles with unsourced statements Articles with unsourced statements from February Use dmy dates from February This Policy can be for covering only political risks or for covering comprehensive risks i. Cover for dividend receivables may not be given in case of risky countries; cover only for original investment.
Schfme further premium is payable if the exporter is not declared successful in the bid.
Export Credit Guarantee Corporation of India
Where the Commercial risks are absent, e. How does TT Telegraphic Transfer work? Premium Rate Base rate 2. This scheme provides protection for Indian Investments abroad. The political risk policy on the other hand provides protection against political risk policy.
Export Performance Guarantee Export Performance Guarantee is an insurance cover for banks, which issues various kinds of guarantees on behalf of schemr in order to facilitate export transactions 4. 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 latter but also with some pre-shipment cover from the date of contract.
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ECGC Schemes: EEPC India
The Export Performance Guarantee is aimed at meeting such situations. These policies are issued separately for each specific contract, and cover risks normally from the date of contract. An outbreak of war or civil war may block or delay payment for goods exported. The confirming bank will suffer a ecyc if the foreign bank fails to reimburse it with the amount paid to the exporter.
In case, the application for insurance is rejected, half the fee paid shall be refunded. 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.
These scheme are targeted at specific audiences such as banks, investors in scgc countries and exporters taking up long term projects abroad, covering distinct risks faced by them. The basis for cover will be a reference rate agreed upon. The investment should not in any way conflict with the policy of both our government and the overseas government. Exchange Fluctuation Risk Cover will normally be provided along with suitable credit insurance cover.
Longer credit period may be approved only in the case of exceptionally large Projects if the circumstances of the case justify it. When is the premium to be paid? Income from the premium is allocated over the tenor of the cover extended.
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 ecyc, etc. Why does Palletization require? Instalment facility may be granted for payment of a part of the premium if the contract value is very large and if the shipments are spread over a relatively long period, but the entire premium will have to be paid by the time the last shipment is made.
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. This apart loss on account of exchange rate fluctuations are also provided for. The Transfer Guarantee seeks to safeguard banks in India against losses arising out of such risks.
The loss or gain within a range of 2 percent of the reference rate will go to the exporter’s account. 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. Two types of policies have been evolved to cover contracts with i Government buyers and ii Private buyers.
In case of loan, the insurance will cover the principal as well as interest actually earned. The schene features of a Construction Contract are that a the contractor keeps raising eecgc 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 period of insurance cover will not normally exceed 15 years in case of projects involving long construction period. ECGC may consider providing cover in the absence of any such agreement provided it is satisfied that the general laws of the country afford adequate protection to the investments.
What does LCL mean? In order to protect such exporters ECGC has the following types of covers. The Exchange Fluctuation Risk: 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.