COST OF CREDIT FOR EXPORTERS

Cost of credit for exporters is expected to come down.  The rupee export credit interest rates are likely to be below 4% and 8% respectively under ECGC’s (Export Credit Guarantee Corporation) expanded Export Credit Insurance Scheme (ECIS).

1. The Government has announced the expansion of the scheme offering higher insurance cover to the exporters in order to facilitate the banks further which is now increased to 90% for the working capital loans, covering both principal and interest and moderation in premium incidence for the MSMEs.
2. This enhanced cover will in-turn ensure that foreign and rupee export credit interest shall be 4% and 8% for the exporters.
3. Also it is proposed to issue a single cover document to cover ECIS for both Pre shipment and Post shipment unlike two separate documents being issued by ECGC at present.
4. All standard accounts covered under ECGC as on date of transition will be eligible for cover under the ECIS.
5. The ECIS support will be in force for a period of 5 years and on conclusion the standard ECGC cover will be available to the banks with its regular features.
6. The premium rates will be as under:

7. Also there is a proposal to simplify the procedure for settlement of claims and for provisional payment up-to 50% within 30 days on production of use of end use of advances in default by the insured bank.