Bikky Khosla | 02 Aug, 2022
ECGC Ltd, formerly known as Export Credit Guarantee
Corporation of India Ltd, last week introduced a new scheme which is likely to
benefit the exporter community, particularly small exporters. The organisation
-- which provides credit risk insurance and related services-- extended support worth Rs.6.18
lakh crore to exporters in the last financial year, and the launch of the new
scheme, which will increase the insurance cover to
the extent of 90% for
small exporters, is no doubt a welcome move.
new benefits will be available under the ‘Export Credit Insurance for Banks
Whole Turnover Packaging Credit and Post Shipment’. In an official release, the
Commerce Ministry said that “the enhanced cover shall be available for manufacturer- exporters availing
fund-based export credit working capital limit up to Rs 20 crore (i.e., total
Packaging Credit and Post Shipment limit per exporter/exporter-group) excluding
the Gems, Jewellery & Diamond sector and merchant exporters/traders”.
Ministry added that as a result of this new scheme, banks which hold ECGC’s WT-ECIB cover, will be able to “explore the
possibility of reducing interest rates further” and this, in turn, will benefit
all stakeholders. In other words, due to introduction of the scheme, more
small exporters will come forward for bank credit and as a result, we may
expect banks to provide more concessions, including lower rate of interest, to
small exporters. This sounds encouraging.
These days, costs of exports have risen significantly as
a result of lack of availability of ships due to the ongoing Russia-Ukraine
crisis. In the background of this, the new scheme will certainly be a relief to
our small exporters. Meanwhile, the next meeting of the RBI monetary committee is
scheduled to be held during August 3-5, and according to some economy watchers,
this time the central bank may take a bit softer stance, considering the receding
risks of inflation.
I invite your opinions.