Export Guarantee Corp pays record claim of Rs 713 crore

MUMBAI: Banks and exporters have made claims of Rs 713 crore from the state-owned Export Credit Guarantee Corporation (ECGC) in 2011-12, reflecting a rise in bad assets in the export finance sector due to the economic slowdown and Eurozone crisis. ECGC received premium of Rs 1,005 crore in 2011-12 as against Rs 885 crore in the previous year.

The company made recoveries of Rs 169 crore during the year. It has now formed a recovery cell to improve recovery.

"Our recovery is not as good as our global peers. We expect to improve recovery after this cell is formed," said N Shankar, chairman and managing director, ECGC. Banks resort to debt recovery tribunals and Sarfaesi Act or the Securitisation Act to recover loans. ECGC insures different risks arising out of non-payment due to commercial and political risks.

Banks are suffering losses on pre-shipment and post-shipment finance as exporters are defaulting on dues because of the Eurozone crisis.