Export Credit Guarantee Corporation of India (ECGC) has introduced ‘NIRVIK’ scheme to ease the lending process and enhance loan availability for exporters.

  • The details of the scheme were shared by Union Minister of Commerce and Industry and Railways, Piyush Goyal on September 16, 2019, during a press conference.
  • The scheme was announced by the Finance Minister Nirmala Sitharaman on September 14 as a part of measures to boost exports.
  • The Export Credit Guarantee Corporation of India (ECGC) currently provides credit guarantee of up to 60 percent loss.
  • The new Export Credit Insurance Scheme (ECIS) which has been named the NIRVIK scheme will raise the insurance cover guarantee to 90 percent coverage of the principal and interest.
  • Half of the insurance cover will be provided within 30 days.
  • The insurance cover will include both pre and post-shipment credit whereas in the present system two different documents are issued by the ECGC for both.
  • Under the ‘NIRVIK’ scheme, gems, jewelry and diamond(GJD) sector borrowers with a limit of over Rs 80 crore will have a higher premium rate in comparison to the non-GJD sector borrowers of this category due to the higher loss ratio.
  • The scheme is being introduced for a period of 5-years and when the time period is over, the standard ECGC covers will be made available to the Banks with its regular features.
  • For accounts with limits below Rs 80 crore, the premium rates will be set at 60 per annum and for those exceeding Rs80 crore, the rates will be fixed at  0.72 per annum for the same enhanced cover.
  • The inspection would be waived for up to ₹10 crore. But the inspection of bank documents and records by ECGC officials is mandatory in case of losses of more than Rs.10 crore as against the present Rs 1crore.
Benefits of the scheme
  • The benefit to banks from this increased cover is that this is in effect a credit enhancement scheme. The rating for the bank loans to exporters becomes AA due to this enhanced insurance cover.
ECGC ●     The Export Credit Guarantee Corporation of India (ECGC) is a fully government-owned company that was established in 1957 and based in Mumbai, Maharashtra. ●     It comes under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. ●     It is managed by an Asset Management Company which includes representatives from the Government, Reserve Bank of India, banking, insurance and exporting community. ●     The functions of ECGC are Functions ●     To provide credit risk insurance covers to exporters against loss in export of goods and services. ●     It offers guarantees to banks and financial institutions so that they provide better facilities to exporters. ●     It ensures Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan and advances. Read More Articles: Reforms In the Banking Sectors Bad policy decisions in 2018 impacted renewable energy growth