NEW DELHI : The Export Credit Guarantee Corporation of India (ECGC) has tightened the conditions for insurance cover for Indian exports to Sri Lanka. It said that it has modified underwriting policy for export transactions to Sri Lanka. The modification in insurance cover got effective from April 7, 2022.
After carrying out a review of the rating of Sri Lanka in view of prevailing economic and political crisis, ECGC, which offers credit guarantee has changed the cover category from Open Cover to Restricted Cover category (RCC-1). This category of export credit guarantee offers revolving limits and is normally valid for a year after being approved on a case-to-case basis. However, the premium rates for the shipments insured under the insurance covers will remain unchanged, ECGC said in a press release.
Industry experts said, that the public sector export insurer has tightened the policy cover due to current crisis so that it can monitor the risk of underwriting. But previous policies issued for exports will remain unchanged and will be honoured as per the documents.
According to ECGC, this change has been made to ensure that ECGC is able to assess and monitor risks covered under its export credit insurance policies and to place appropriate risk mitigation measures. It claimed that the measure will assist ECGC customers i.e. exporters in improving payment realisation prospects from buyers in Sri Lanka.
ECGC has also asked to contact their servicing branch of ECGC for cover on shipments to Sri Lanka. “ECGC continues to monitor the situation and further review of the underwriting policy will be undertaken based on future developments,” it said.