Export Credit Guarantee Corporation?s (ECGC) premium collection rose by 13.55% for 2011-12 to R1,005 crore while claims paid to exporters and banks rose 15% to R713 crore from R621 crore, company chairman N Shankar said at a press meet.
Claims paid rose faster because of the adverse global financial conditions. The gross premium collections increased steadily over the past five years while claims have jumped in 2011-12 after a brief dip the previous year. The corporation declared a profit of R225.21 crore for the year, more than double over previous year.
Shankar said the rise in profit has been sharp because of a fall in the previous two years. To promote Indian exports, ECGC issued an umbrella risk cover to State Bank of India wherein the entire export credit portfolio of the bank would be covered, said Shankar. Called whole turnover pre-shipment and post-shipment cover, ECGC plans to extend this to associate banks of the SBI group as well. ECGC?s risk cover to exporters indirectly through banks is around 60-65% of its total risk cover portfolio, executive director Geetha Murlidhar said.
Banks seek insurance from the ECGC so as to avoid setting aside huge capital against export credit. Risk weight on export credit is 100%, but can be brought down to 50% if banks have cover from the ECGC. In 2011-12, the corporation has covered 4,500 branches of banks and 30,000 exporters through insurance. It covered gross risk value of R99,550 crore in the year. The corporation aims to boost its recoveries and will set up a dedicated department for the same in the current year, Shankar said. The corporation’s recoveries rose 24% in 2011-12. ECGC has proposed to pay R54 crore as dividend to the centre, Shankar said.
