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ECGC introduces Nirvik to enhance loan availability for exporters

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 September 2019.

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 ratio.

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 5years.

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.

 Small 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.

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