Cost of credit for exporters will go down significantly with foreign and rupee export credit interest rates likely to be below 4 per cent and 8 per cent respectively under the ECGC’s (Export Credit Gurantee Corporation of India) expanded Export Credit Insurance Scheme (ECIS).

The expansion of the scheme offering higher insurance cover for export credit was announced by Finance Minister Nirmala Sitharaman.

“To facilitate banks further, the Ministry of Commerce & Industry has enhanced insurance cover for banks up to 90 per cent for the working capital loans, for both principal and interest, and moderation in premium incidence for the MSME sector. Enhanced cover will ensure that foreign and rupee export credit interest rates will be below 4 per cent and 8 per cent respectively for exporters,” Goyal said addressing a press conference on Monday.

A single cover document for ECIS shall be issued covering both the pre-shipment and post-shipment advances unlike the two different documents being currently issued by ECGC. “All standard accounts covered under ECGC as on the date of transition, shall be eligible for cover under the ECIS,” according to a Commerce Ministry release. The ECIS support shall be in force for a period of 5-years and on conclusion, the standard ECGC covers will be available for banks with its regular features.

“For accounts with limits below ₹80 crore, the premium rates will be moderated to 0.60 per cent per annum and for those exceeding ₹80 crore, it will be 0.72 per cent per annum for the same enhanced cover,” Goyal said.

The Minister also said the ECIS envisages simplified procedure for settlement of claims and for provisional payment up to 50 per cent within 30 days on production of proof of end-use of the advances in default by the insured bank.

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