ECGC plans separate insurance cover for software exporters

Export Credit Guarantee Corporation of India Ltd (ECGC) expects to offer a separate insurance cover for software exporters in the next few weeks.

A formal approval from the Cabinet Committee on Economic Affairs is awaited by the Corporation for an infusion of share capital of about Rs 500-800 crore for this.

P M A Hakeem, CMD, ECGC, said, "There are very unique problems relating to software exporters due to which we will be providing a separate insurance cover." Payment risks of the software exporters are different compared to the usual payment risks of exporters.

Hakeem said that the modalities of the policies have been worked out in tandem with the information technology sector.

"We are yet to place it before the board of directors of ECGC and submit it for approval of the Insurance Regulatory Development Authority."

The infusion of sharecapital, when approved by the Cabinet Committee, will be done in a phased manner, of Rs 100 crore every year, he added.

ECGC garnered a premium income of Rs 444 crore and incurred a claims of Rs 455 crore in 2003-04. Profit before tax is estimated to be around Rs 92 crore and net profit is expected to be around Rs 60 crore, as financial accounts have not been finalised.

The company expects its premium income to increase by 18 per cent during the current financial year. Project exports and consignment exports are likely to do well this year, he said.