Export Credit Guarantee Corporation (ECGC) Ltd. is in the process of approaching the Reserve Bank of India (RBI) to authorise it to deal with foreign currency for the benefit of exporters.
ECGC is the Government of India enterprise that provides export credit insurance.
In an event, M. Senthilnathan, CMD, ECGC, said “We are trying various methods to help reduce the cost for exporters. We are applying to the RBI so that they can give us authorisation to deal with foreign currency and we will provide funds in foreign currency and factoring will be done in the foreign currency in which bills are drawn.”
“So that we can charge interest as applicable in the western markets and some margin. Once permission is given to ECGC as authorised dealer of factoring in foreign currency, may be, we will do more factoring. Currently only three to four exporters are doing factoring,” he added.
He urged exporters to grow their international business by giving credit to buyers and take adequate insurance.
A. Sakthivel, President, Federation of Indian Export Organisations (FIEO), said every exporter must take credit insurance. He urged the Government and the ECGC to devise special credit insurance products for MSMEs that form a large chunk of the exporter count. He also suggested that ECGC should consider setting a fixed time limit for settlement of claims and go online for the convenience of exporters.
