Insurance cover for export losses to be extended to A/Cs with limits up to Rs. 50 crore

Export promotion organisation Export Credit Guarantee Corporation of India (ECGC) announced the expansion of 90 per cent insurance cover for exporters with a credit limit of Rs 50 crore, a cover limited to those with a limit of Rs 20 crore earlier.

However, exporters with a credit limit of Rs 20 crore previously used to get an insurance cover of 60 per cent which was only last year increased to 90 per cent. Piyush Goyal, Union Minister for Commerce and Industry, said that this change will be effective July 1, 2023.

Currently, there four banks associated with the scheme, providing Rs 50 crore credit for exports, and this expansion is set to benefit 3,000 exporters. Meanwhile, the ECGC has also chosen to extend this cover to another nine banks which in turn will benefit another set of 3,000 exporters.

Goyal mentioned plans to meet more bankers next week to request their alliance with this scheme. Goyal also explained that with the provision of 90 per cent insurance cover, exporters’ accounts become AA accounts, which enables interest rates to go down. This tag also helps banks when it comes to giving loans.

“With 90 per cent insurance cover, banks have been assured and with this the interest rate has come around repo rate plus 2.2 per cent for all AA rated accounts,” the minister said. “This interest rate will be applicable to the exporters’ with exports up to Rs 50 crore as well.”

Further, he also guaranteed that in the next four to five months, all activities at ECGC will be digitised to quicken the procedure. The resolution of disputes will be done via video conferencing, he said.