Export Credit Guarantee Corporation of India (ECGC), which provides export credit insurance facilities to exporters and Indian banks, reported profit after tax at`276.22 crore in FY16, an increase of around 53% compared to `180.10 crore in FY15.
Despite paying claims of `1,122.84 crore to Indian exporters and financing banks in the last fiscal, most of the profit for the firm came from their investment income. ECGC earned investment income of `633 crore in FY16 as against `544 crore in FY15. In the last financial year, gross claim payment for ECGC almost doubled to `1,122.84 crore in FY16 from `590 crore in FY15.
“Gem and jewellery sector continues to be the largest sector with increased claims during the reporting period as we had to pay claims worth `871 crore under the segment during the reporting year,” said Geetha Muralidhar, chairman cum managing director at ECGC. Apart from gems and jewellery, claims came from sectors such as agriculture commodity, ready made garments, synthetic yarn and engineering goods.
ECGC paid out 439 claims worth `127.32 crore to exporters under direct policies and 172 claims worth `995.52 crore to financing banks under export credit insurance covers issues to banks in last financial year. Banks continue to contribute two-third of ECGC’s premium income, whereas 90% of claims paid by the corporation during the reporting period were from banks.
The corporation has reduced its premium by 17% on an average since April 1 which was done on the recommendations made by the Hakim Committee report. The current market share of ECGC is around 8% and management is planning it to increase to 9% by the end of current financial year and 12% in five years.
“One of the major points of discussion will be to fasten our offer document process by the regulator. In the past we have seen our new offer documents not getting cleared for months and we miss our clients deadlines which eventually impacts our business,” said a senior officer on condition of anonymity.