Export Credit Guarantee Corporation

Why in news?

• The Union Cabinet approved the listing of state-run Export Credit Guarantee Corporation (ECGC) on the stock exchanges.

About Export Credit Guarantee Corporation:

• ECGC Ltd. (Formerly Export Credit Guarantee Corporation of India Ltd.), wholly owned by Government of India, was set up in 1957 with the objective of promoting exports from the country by providing Credit Risk Insurance and related services for exports.
• It functions under the administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, and insurance and exporting community.
• ECGC has designed different export credit risk insurance products to suit the requirements of Indian exporters and commercial banks extending export credit.
• ECGC is essentially an export promotion organization, seeking to improve the competitiveness of the Indian exporters by providing them with credit insurance covers.
• ECGC keeps its premium rates at the optimal level.

What does ECGC do?

• 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

How does ECGC help exporters?

• ECGC Offers insurance protection to exporters against payment risks.
  • Provides guidance in export-related activities.
  • Makes available information on different countries with it’s own credit ratings.
  • Makes it easy to obtain export finance from banks/financial institutions.
  • Assists exporters in recovering bad debts.
  • Provides information on credit-worthiness of overseas buyers.

PRELIMS QUESTION

Which of the following statements is/are correct regarding the Export Credit Guarantee Corporation?

1. It offers insurance protection to exporters against payment risks.

2. It functions under the administrative control of Ministry of Commerce and Industry

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer