ECGC covers all the risks except

Hello sir would you please provide me information about which risk doesn’t cover by ECGC please tell me information about it

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.

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

ECGC Provides

Offers insurance protection to exporters against payment risks

Provides guidance in export-related activities

Makes available information on different countries with its own credit ratings

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

Assists exporters in recovering bad debts

Information on credit-worthiness of overseas buyers

The covers issued by ECGC can be divided broadly into four groups:

1. Standard Policy
Shipments (Comprehensive Risks) Policy, which is 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. The policy covers both commercial and political risks from the date of shipment.

2. Other Specific Policies
Specific Policies are designed to protect Indian firms against payment risks involved in a) exports on deferred terms of payment b) services rendered to foreign parties and c) construction works and turnkey Projects undertaken abroad.

3. Financial Guarantees
Financial Guarantees are issued to banks in India to protect them from risks of loss involved in their extending financial support at pre-shipment and post-shipment stages. These also cover a host of non-fund based facilities that are extended to exporters.
Export Performance Guarantee

4. Special Schemes
Transfer Guarantee meant to protect banks which add confirmation to Letters of Credit opened by foreign banks, Insurance cover for Buyers Credit and Lines of Credit, and Exchange Fluctuation Risk Insurance.

Under the Standard Policy, ECGC covers, from the date of shipment, the following risks:

a. Commercial risks

Insolvency of the buyer

Failure of the buyer to make the payment due within a specified period, normally four months from the due date.

Buyer's failure to accept the goods, subject to certain conditions

b. Political risks

Imposition of restriction by the Government of the buyer's country or any Government action, which may block or delay the transfer of payment made by the buyer.

War, civil war, revolution or civil disturbances in the buyer's country.

New import restrictions or cancellation of a valid import licence in the buyer's country.

Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which can not be recovered from the buyer.

Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.

The policy does not cover losses due to the following risks:

Commercial disputes including quality disputes raised by the buyer, unless the exporter obtains a decree from a competent court of law in the buyer's country in his favor.

Causes inherent in the nature of the goods.

Buyer's failure to obtain necessary import or exchange authorization from authorities in his country.

Insolvency or default of any agent of the exporter or of the collecting bank.

Loss or damage to goods which can be covered by general insurers.

Exchange rate fluctuation.

Failure or negligence on the part of the exporter to fulfil the terms of the export contract.

Contact Detail

Registered Office
Express Towers,10th Floor,
Nariman Point,
Mumbai - 400 021.
Tel : 6659 0500 / 6659 0510
Fax : (022) 6659 0517 / 0546
E-Mail : webmaster@ecgc.in

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Answered By StudyChaCha Member