The Hindu Business Line : `Credit insurance strengthens process across borders'

SPEAKING OUT: Mr P.S.Murali, Assistant General Manager, Export Credit Guarantee Corporation of India Ltd., Madurai, addressing the inaugural meeting of the Business Line Club at the Department of Management Studies, V.H.N.S.N College, Virudhunagar. — G. Moorthy

Madurai March 28 Though pessimism is part of life, optimism lends to furthering productive activity and credit insurance strengthens the process across the borders, said Mr P.S. Murali, Assistant General Manager, Export Credit Guarantee Corporation (ECGC) of India Ltd, Madurai.

He was addressing the inaugural meeting of the Business Line Club at the Department of Management Studies, V.H.N.S.N College, Virudhunagar, near here.

Speaking on `Significance of credit insurance in export market', Mr Murali said trading within the country was different from trading between the countries. This always carries elements of risk of diverse nature.

Tackling risks

While certain risks could be foreseen and provided for, there are always totally unforeseen risks that are required to be guarded against so that exporters do not end up in a loss leading to insolvency. The act of taking up an insurance cover towards such risks paying a nominal premium helps the exporters at times of real distress, he said.

Explaining the various types of risks at length and in detail, Mr Murali further said credit insurance was a major risk. The role of banks in facilitating trade on credit played a major role in the promotion of exports between the countries.

In the process, the role of organisations like ECGC assumed much significance, he observed. The guarantee extended by the organisation based on certain policy initiatives and principles, while providing the required confidence to carry on the operations notwithstanding the risks, strengthens the mechanism to build on the confidence of the exporters, and the exports of a country in earning sizable foreign exchange.

`Yeoman service'

It is in the interest of exporters to take the necessary insurance cover to protect themselves from risks not under their control, he emphasised. Explaining the role of ECGC since its inception in 1957, he said that it has been rendering yeoman service successfully for export trade and is thinking of extending the insurance cover for internal credit trade too, he added.

Mr M. Jegadesh Kumar, Assistant Regional Manager (Circulations), The Hindu, Madurai, Prof P.M.A.P.A.R. Ayyamperumal, Head and Dr R. Neelamegam, Co-ordinator, Department of Management Studies, were also present.

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