Export Credit Guarantee Corporation of India Ltd

CORPORATE

ECGC Strengthens its Balance Sheet :

settles claims of Rs.548 cr during 2012-13

Export Credit Guarantee Corporation of India Ltd. (ECGC) paid out aggregate claims of Rs. 548 Crores to Indian exporters and financing banks during FY 2012-13 in the wake of continuing global economic recession and uncertainties.  GOI has subscribed Rs. 100 Crores in Sept 2012 towards paid-up capital of the Corporation. Now the Corporation’s paid-up capital stands at Rs.1000 crores, same as its Authorised Capital. Earlier, Shri. Anand Sharma, Minister for Commerce, Industry & Textiles has indicated that Govt. may consider increase in authorized capital of the Corporation to Rs.5,000 crores.  The Corporation’s Net Worth as on Mar 31, 2013 is Rs.2437 crores and it has built up cumulative provision aggregating to Rs.2,588 crores as on Mar 31, 2013.  The Corporation’s investments and bank deposits are over Rs.5,000 crores. The Corporation’s Solvency Ratio as on Mar 31, 2013 was 9.64 vs the Regulator’s norm of 1.5. ECGC was established in the year 1957 to support and increase Indian exports by providing export credit insurance. The organization is ‘iAAA ‘rated by ICRA which denotes highest claim paying ability.

Addressing a media meet to highlight business performance for the FY 2012-13, Shri. N. Shankar, Chairman cum Managing Director of ECGC mentioned that the Corporation was able to meet expectations of its customers as well as stakeholders. During the past three years, Indian exporters, particularly in labour intensive sectors, suffered financially owing to the global economic meltdown and resultant failure of a large number of overseas buyers and even banks.  European crisis, political instability and strife in many countries like Libya, Syria, Egypt, Afghanistan, Sudan and Iraq, have further heightened risks for exporters and financing banks. Therefore, role of ECGC, the national export credit insurer of India, continues to be very important and crucial as exporting without suitable credit insurance is fraught with huge financial and business risks. During FY 2012-13, ECGC paid out 475 claims worth Rs.113.42 Crores to exporters on 383 buyers in 70 countries under direct policies, and 193 claims worth Rs.396.61 Crores. to financing banks under Export Credit Insurance to Banks. Major sectors under which the claims arose are readymade garments & textiles, gems & jewellery, engineering goods, agro products, chemicals, marine products, cotton, yarn, fabrics & leather.

During FY 2012-13, ECGC earned a gross premium of Rs.1157 Crores, registering a growth of 15% over the previous year figure.  As on 31.03.13, ECGC had 11,720 short term Policies and 497 ECIB covers in force. Under the ECIB covers, over 31,000 accounts of exporters with 4,136 branches of banks were covered. The Corporation presently covers around 60% of export credit disbursements by banks in India.  As regards Policy business, the Corporation presently underwrites risks on 237 countries of the world and maintains records of about one lakh active buyers all over the world. During the FY 2012-13, the Corporation added 16127 new buyers to its database. The data on the buyers is used for underwriting commercial risks on the buyers. ECGC covered gross risk value of Rs.1,26,100 Crores under its Short Term  Policy schemes for exporters during FY 2012-13.

ECGC also covers risks of project exporters and banks involved in medium & long term exports. Under this sector, the Corporation issued 31 Policy covers to exporters and 195 covers to banks during FY 12-13.  Major projects, supported by ECGC, are being executed in Malaysia, Myanmar, Sri Lanka, Kenya, Qatar and Iraq.   

On account of Govt. of India, ECGC operates National Export Insurance Account (NEIA) Trust to provide insurance support to large value projects in high risk countries, which are beyond underwriting capacity of the Corporation. Seven covers with aggregate risk value of Rs.1,729 Crores, were issued by NEIA Trust during FY 2012-13 in respect of projects undertaken in Algeria, Sri Lanka, Zambia & Iraq. Total Corpus of the Trust stood at Rs.1,443 Crores. as on 31.03.13.

Dwelling on the financial results of the Corporation for FY 2012-13, Shri. N Shankar mentioned that the Corporation’s financial results during the year were highly satisfactory.  After making adequate provisions for pending claims and probable claims in respect of impending risks as on 31.03.13, the Corporation earned PBT of Rs. 350.14 Crores registering a growth of 7% over the previous year. Dividend PROPOSED to its sole shareholder, Govt. of India, will be Rs.60 Crores. PAT for the FY 2012-13 stood at Rs. 242.79 Crores compared to Rs. 225.21 Crores during the previous year.  A sum of Rs.172.60 Crores is transferred to General Reserve.

During the year 2012-13, ECGC took various initiatives to promote exports and improve services to its customers viz exporters & banks. These include opening three new Branches at Faridabad, Tirupur & Hyderabad; organizing export promotion seminars in association with Trade Bodies & Export Promotion Councils at important export centres; motivating exporters through Awards for high performing exporters in different segments and introducing a comprehensive Buyer Score Card System. The Corporation is also revamping its other products and is in the process of introducing a special Policy scheme for MSME sector.

Regarding the latest important initiatives, CMD, ECGC informed that the Corporation will be shortly opening its first overseas office at London which will help ECGC in better assessment and management of risks in European markets and recovery of paid claims. The Corporation has recently set up an independent Committee of external experts as a customer care initiative to review representations from exporters.