ECGC, the state-run agency giving credit cover for exporters, has set an ambitious target to provide credit risk cover of Rs 10 trillion in the current financial year, up from Rs 6.68 trillion in 2022-23, chairman and managing Director of the company M Senthilnathan said on Friday.

ECGC, earlier named as Export Credit Guarantee Corporation of India, also plans to increase the ambit of the Export Credit Insurance for Banks (ECIB) that started last year.

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Under ECIB working capital loans by banks to exporters of up to Rs 20 crore were extended insurance cover against defaults. From this year, the benefit of enhanced cover will be extended to accounts with limits up to Rs 50 crore at no additional cost and this will benefit 3000 exporter-borrower accounts, Senthilnathan said at a press conference.

The government was planning an Initial Public Offer of ECGC but it got postponed. The company is IPO ready and the Department of Investment and Public Asset Management will decide on it, Senthilnathan said.

Four banks – State Bank of India, Central Bank of India, Bank of Maharashtra and Saraswat Bank – are part of the ECIB.

“The experience under the cover has been satisfactory in terms of low default ratio in the last one year. It has resulted in easing of interest rates on loans obtained from banks by exporters,” Commerce and Industry Minister Piyush Goyal said.

ECGC will also provide enhanced cover under the policy covers providing protection against commercial and political risks on account of the overseas buyers issued to the exporters in the policies available for sale in all the channels.

“Full 100% cover will be provided for existing policyholders where ‘No Claim Bonus (NCB)’ is 50% and the policy proposal has been received directly from the exporters and not through insurance brokers. Additional cover of 5% under the policies will be given where the proposal is received directly from the exporter and not through insurance brokers,” Senthilnathan said.

Goyal said all procedures of ECGC will be made fully digital in the next few months and a new grievance redressal mechanism at ECGC Ltd. will be established where a Live video-conference facility will be available daily for one hour on the website of the company.

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When the idea of ECGC IPO was floated, there was a view that the company might need to increase its capital if there were a default in payment by customers of Indian exporters due to COVID and geopolitical developments. As the situation remained under control the need for extra capital did not arise.

The paid-up capital of the company now stands at Rs 4300 crore and its net worth is Rs 10,000 crore. ECGC is a profitable dividend paying company. Last financial year it paid Rs 276.5 crore dividend to the government, its sole shareholder.