Public sector Export Credit Guarantee Corporation of India (ECGC) settled claims worth a record Rs 713 crore of Indian exporters in 2011-12 amid the global economic slowdown and resultant failure of a large number of overseas buyers. N Shankar, Chairman & Managing Director of ECGC, spoke to George Mathew about the export credit scenario. Excerpts:
After the 2008 global crisis, banks are coming to ECGC for export credit cover. Did they burn fingers?
Offering insurance cover for banks export credit is something unique. Other countries are not doing this. For example, after 2002-03, SBI said it didn’t want to go for cover and kept away for 5-6 years. Now they are offering the entire export credit for insurance cover. The corporation presently covers roughly 70 per cent of total short term export finance disbursed by banks in India.
Has the euro zone crisis affected you? Have you put any curbs?
Euro zone has affected exports. As far as we are concerned, we are open to all the countries. We have classified country risk in seven categories. But we have not changed the pricing. We have not increased the rate for Euro zone. We go on reviewing the country risk every year. We also have a category called restricted cover countries. Countries which are under UN sanctions come under this category.
Have you increased the pricing in the wake of the global slowdown? Have claims come down this year?
We have not changed our premium in the last ten years. In fact, we are the only institution that has not changed the premium. Exporters are already suffering. If I increase the rate, they will suffer more. Claims this year are not high when compared to the last year. 728 claims for an amount aggregating Rs 713 crore of banks and Indian exporters were settled in during FY 2011-12 in fulfilling its objective of export promotion. This is the highest ever amount of claim paid in any financial year in the history of the corporation which was established in 1957 to support and strengthen Indian exports. We hope to do better this year.
How is your premium collection this year?
Our premium collection for whole of last year was around Rs 1,005 crore, a growth of 13.5 per cent compared to the previous year. We collected Rs 600 crore up to the first seven months this year. The major sectors for which covers were issued comprised agro products, readymade