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The Export Credit Guarantee Corporation of India will not increase premiums for extending credit insurance cover to exporters. This is despite the ongoing Euro Zone debt crisis and political trouble in West Asia and North Africa.
“There is no case for upward revision in premiums. However, we are constantly monitoring the global developments,” said Ms Geetha Muralidhar, Executive Director.
ECGC has not increased premiums for providing credit insurance cover to exporters for the last 10 years. If premiums are raised, it would hurt Indian exporters.
The Corporation, among others, provides credit insurance cover to exporters against credit losses in exports, and issues guarantees to banks to enable them extend better financial facilities to exporters.
In FY12, ECGC collected gross premium aggregating Rs 1,005 crore compared with Rs 885 crore in FY11.
Recovery
To improve recovery from claims already settled, the Corporation will set up a dedicated recovery unit, said Mr N. Shankar, Chairman and Managing Director.
In the case of global credit insurers, the recovery from claims already settled is 20-30 per cent. However, in the case of ECGC it is 2-5 per cent, explained a senior official.
“The dedicated recovery unit will help us catch up with the global recovery benchmark,” he said.
In FY12, ECGC made recoveries aggregating Rs 169 crore, against Rs 136 crore in FY11.
Claims paid
ECGC has paid claims aggregating Rs 713 crore to exporters and banks in FY12, against Rs 621 crore in FY11.
The claims paid to exporters according to the export destination are: The US (17 per cent); Dubai (15 per cent); Germany and Italy (7 per cent each); the UK (5 per cent); Russia (4 per cent); Greece, Turkey and Nicaragua (3 per cent each); and Portugal (2 per cent).
Net profit
ECGC earned a net profit of Rs 225.21 crore in FY12, against Rs 85.66 crore in the previous year. The profitability was boosted by lower claims provision, higher investment income and recoveries, and reduction in expenses.
In FY12, the Corporation's capital base will be augmented by Rs 100 crore to Rs 1,000 crore, said Mr Shankar.
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