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CCI rejects complaint against Export Credit Guarantee Corp

Press Trust of India  |  New Delhi 

The Competition Commission has rejected allegations of unfair trade practices against Export Credit Guarantee Corp related to credit insurance for exporters.

A complaint filed by Tavoy Apparels and its group firms had alleged that even after one-time settlement with Union Bank of India for export credit loan taken from it, Export Credit Guarantee Corporation of India (ECGC) refused to delete the name of the complainants from the defaulters list known as 'Special Approval List'.

It was alleged by the complainant that ECGC had violated competition norms by imposing unfair and discriminatory conditions on the sale of services by banks to exporter companies through its agreement with various banks.

Further, it was alleged that ECGC had imposed unfair condition of not extending "trade credit" to the complainants whose names appeared on the defaulters list.

In an order dated February 12, the Competition Commission of India (CCI) said that "prima facie, no case of violation of the provisions of ...The (Competition) Act arises out against opposite party 1 (ECGC)".

Citing High Court rulings, the fair trade watchdog noted that inclusion of name of the petitioners in the 'Special Approval List' did not amount to blacklisting and it was neither arbitrary, nor illegal and there was no violation of the principles of natural justice.

It also observed that ECGC letter to the complainants had informed them that since "the claim paid amount was not fully realised they were not in a position to remove their names from Special Approval List (defaulters list)".

"There was nothing on record before the Commission to suggest that one-time settlement of the informant with OP2 (Union Bank) was approved by OP1 (ECGC)," CCI said.

The complainants had stated to the Commission that it had availed of export credit of about Rs 6.25 crores in 1995 from Union Bank and that the bank had taken insurance cover for its export credit portfolio from ECGC.

Among others, the informant had alleged that even in circumstances where the bank had cleared the name of the exporting company and issued "no dues certificate", ECGC continued to maintain the name of the exporting company in the defaulters list.

The complainants averred that as long as the exporter company and its group companies figured on the list, no bank would grant credit facility to any of them until the names were removed from that list.

ECGC is the national export credit insurer of India, functioning under the administrative control of Ministry of Commerce & Industry and is registered with the insurance regulator IRDA to provide non-life insurance.

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First Published: Wed, March 05 2014. 16:07 IST