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Govt nods Rs 4,400 cr capital infusion in ECGC for five years
ECONOMY & POLICY

Govt nods Rs 4,400 cr capital infusion in ECGC for five years

The centre has approved a Rs 4,400 crore capital infusion into credit insurance provider ECGC Limited over five years starting from FY22.

It also approved the company listing on the domestic bourses, which is expected to happen in the next financial year.

In the current financial year, Rs 500 crore will be added out of the total amount. In FY23, another Rs 500 crore will be infused, commerce and industry minister Piyush Goyal told the media. The remaining amount will be infused as and when required.

Listing on domestic bourses will result in more transparency and accountability and allow the company to mobilise fresh capital from the market, either through the same initial public offering (IPO) or subsequently by a follow-on public offer (FPO).

This will also end in increasing its maximum liabilities to Rs 2.03 trillion from Rs 1 trillion by FY25-26.

The approved infusion along with efforts made to suitably synchronise with the listing process of state-owned credit insurance provider ECGC by the IPO would improve the underwriting capacity of ECGC to help more exports.

ECGC was established more than five decades ago to promote exports by giving credit insurance services to exporters against non-payment risks by overseas buyers due to commercial and political reasons. ECGC is the top player in the export credit insurance market in India currently.

The announcement arrives when India is looking at reaching the target of a $400 billion export this year, which will also help economic recovery.

Goyal said that India has exported goods worth $185 as of 21 September and is likely to reach the $195 mark during the first six months of the current financial year.

While the government is confident of reaching the $400 billion target, owing to difficulties, it may be hard to exceed the mark, he said.

The sanctioned amount will be infused in installments, thereby improving the underwrite risk capacity up to Rs 88,000 crore, and this will allow ECGC to issue covers that can help further exports of Rs 5.28 lakh crore over the five years in line with the current pattern, as per a statement.

The government also sanctioned the National Export Insurance Account (NEIA) scheme continuation and infusion of Rs 1,650 crore grant-in-aid over five years, from FY22 to FY26.

Image Source


Also read: India needs major banks to meet economic shift: Finance Minister
Also read: FDI to help India become $5 trillion economy: Deloitte CEO

The centre has approved a Rs 4,400 crore capital infusion into credit insurance provider ECGC Limited over five years starting from FY22. It also approved the company listing on the domestic bourses, which is expected to happen in the next financial year. In the current financial year, Rs 500 crore will be added out of the total amount. In FY23, another Rs 500 crore will be infused, commerce and industry minister Piyush Goyal told the media. The remaining amount will be infused as and when required. Listing on domestic bourses will result in more transparency and accountability and allow the company to mobilise fresh capital from the market, either through the same initial public offering (IPO) or subsequently by a follow-on public offer (FPO). This will also end in increasing its maximum liabilities to Rs 2.03 trillion from Rs 1 trillion by FY25-26. The approved infusion along with efforts made to suitably synchronise with the listing process of state-owned credit insurance provider ECGC by the IPO would improve the underwriting capacity of ECGC to help more exports. ECGC was established more than five decades ago to promote exports by giving credit insurance services to exporters against non-payment risks by overseas buyers due to commercial and political reasons. ECGC is the top player in the export credit insurance market in India currently. The announcement arrives when India is looking at reaching the target of a $400 billion export this year, which will also help economic recovery. Goyal said that India has exported goods worth $185 as of 21 September and is likely to reach the $195 mark during the first six months of the current financial year. While the government is confident of reaching the $400 billion target, owing to difficulties, it may be hard to exceed the mark, he said. The sanctioned amount will be infused in installments, thereby improving the underwrite risk capacity up to Rs 88,000 crore, and this will allow ECGC to issue covers that can help further exports of Rs 5.28 lakh crore over the five years in line with the current pattern, as per a statement. The government also sanctioned the National Export Insurance Account (NEIA) scheme continuation and infusion of Rs 1,650 crore grant-in-aid over five years, from FY22 to FY26. Image SourceAlso read: India needs major banks to meet economic shift: Finance Minister Also read: FDI to help India become $5 trillion economy: Deloitte CEO

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