Ministry of Commerce & Industry through Export Credit Guarantee
Corporation (ECGC) has introduced a new Export Credit Insurance Scheme (ECIS)
called NIRVIK to enhance loan availability and ease the lending process.
The details of the scheme were shared by the Commerce & Industry
and Railways Minister, Piyush Goyal and Minister of State for Commerce &
Industry, Hardeep Singh Puri, in a press conference in New Delhi on 16
ECIS announced by FM to boost exports
The scheme was announced by the Finance Minister Nirmala Sitharaman to
boost exports on 14 September 2019 in New Delhi.
Piyush Goyal said that the gems, jewellery and diamond (GJD) sector
borrowers with limit of more than Rs 80 crore will have a higher premium rate
as compared to non-GJD sector borrowers of this category due to the higher loss
ECGC cover additional comfort to banks
The ECGC cover provides
additional comfort to banks as the credit rating of the borrower is enhanced to
AA rated account.
Enhanced cover will ensure that Foreign and Rupee export credit
interest rates will be below 4%and 8% respectively for exporters.
The ECIS support will be effective for
Under ECIS insurance cover percentage
insurance cover percentage
Under ECIS, insurance cover percentage has also been enhanced to 90%
from the present average of 60% for both Principal and Interest.
Exporter, who has an Outstanding Limit below 80 crores can get ECGC’s insurance
premium rate for 0.60 per annum and for those exceeding Rs.80 crore, it will be
0.72 per annum for the same enhanced cover.
Banks will pay premium on a monthly basis on the
Principal & Interest to ECGC as the cover is offered for both
outstandings. Under the scheme, inspection of bank documents and records by
ECGC officials shall be mandatory for losses exceeding Rs.10 crore as against
the current Rs.1crore.
Under this arrangement, if an Exporter
is unable to repay the loan and makes an insurance claim, then ECGC will pay
50% of the claim amount within 30 days.
This new scheme will cover both pre and
post shipment credit.