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).
- 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.
- This enhanced cover will in-turn ensure that foreign and rupee export credit interest shall be 4% and 8% for the exporters.
- 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.
- All standard accounts covered under ECGC as on date of transition will be eligible for cover under the ECIS.
- 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.
- The premium rates will be as under:
|Sr. No||Details||Premium Rate Details|
|1.||For accounts with limit below Rs.80 crores||0.60% per annum|
|2||For accounts with limit exceeding Rs. 80 crores||0.72% per annum (for the same enhanced cover)|
- 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.