The Export Credit Guarantee Corporation of India Ltd., formerly known as ECGC Ltd., would receive 4,400 crores in capital over the course of five years, from the fiscal years 2021–22 to 2025–26, according to a decision made by the Indian government yesterday. The listing of ECGC through an IPO on the stock market was also approved by the Cabinet Committee on Economic Affairs (CCEA).
According to a public statement, the listing and permitted injection will increase ECGC’s ability to support more exports through underwriting.
The government founded ECGC in 1957 under the Companies Act to encourage exports by offering exporters credit insurance services against risks of non-payment by foreign customers owing to political and commercial considerations.
Additionally, it offers insurance protection for banks against risks when lending to exporter borrowers via export credit.
The ECGC will be able to increase its coverage of labor-intensive industries and export-oriented industries with the help of additional capital.
The released statement stated that the approved amount will be infused in installments, increasing the capacity to underwrite risks up to 88,000 crore, allowing ECGC to issue covers that can support additional exports of 5.28 lakh crore over the course of five years, consistent with the current pattern.
By 2025–2026, ECGC intends to expand its maximum liabilities from 1 lakh crore to 2.03 lakh crore.
Newspaper Fibre2Fashion Desk (DS)