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Commerce Minister launches ‘Nirvik’ scheme to enhance loan availability of exporters and MSMEs


 

To enhance the loan availability of exporters, and moderation in premium incidence for the MSME sector, Commerce and Industry Minister Piyush Goyal on Monday made a big announcement that Export Guarantee Corporation of India (ECGC) has launched a new scheme called ‘Nirvik’ under which up to 90% of the principal and interest will be covered under insurance.

Both pre and post shipment credit will also be covered under the new scheme.

‘’If there is any loss, then ECGC provided credit guarantee of up to 60% loss approximately and now under new scheme Nirvik consumers and exporters will covered up to 90% and if there is any loss then in that case ECGC will refund 90% to the banks including principal and interest. Banks will get up to 50 % within 30 days of complain lodge,’’ the minister said.

Enhanced cover will ensure that Foreign and Rupee export credit interest rates will be below 4% and 8% respectively for exporters.

A single cover document for ECIS shall be issued covering both the Pre-shipment and Post-shipment advances unlike the present two different documents being issued by ECGC.

The scheme envisages simplified procedure for settlement of claim and also for provisional payment up to 50% within 30 days on production of proof of end-use of the advances in default by the Insured Bank.

The ECIS support shall be in force for a period of 5-years and on conclusion, the standard ECGC covers will be available for Banks with its regular features.

For accounts with limits below Rs 80 crore the premium rates will be moderated to 0.60 per annum and for those exceeding Rs 80 crore, it will be 0.72 per annum for the same enhanced cover.

Banks shall pay premium to ECGC on monthly basis on the Principal and Interest as the cover is offered for both outstandings.

Under the scheme, inspection of bank documents and records by ECGC officials shall be mandatory for losses exceeding Rs 10 crore as against the present Rs 1crore.

Meanwhile, the Minsiter also launched Common Digital Platform for Issuance of electronic Certificates of Origin (CoO).

‘’This platform will be a single access point for all exporters, for all Free Trade Agreements (FTAs)/ Preferential Trade Agreements (PTAs) and for all agencies concerned. Certificate of Origin will be issued electronically which can be in paperless format if agreed to by the partner countries. Authorities of partner countries will be able to verify the authenticity of certificates from the website,’’ said DGFT in a statement.

Further, it provides administrative access to Department of Commerce for reporting and monitoring purposes. The issuance process is electronic, paperless and transparent while the current process requires the exporter to visit the agency thrice for each certificate.

Now there will be Real-time tracking of FTA utilisation at product level, country level etc while earlier Real-time tracking was not possible as data is fragmented across various agencies. Now the Electronic Certificate of Origin will be issued compared to Physical Certificates of Origin issued earlier. Now it will be possible to electronically exchange CoO with the partner countries whereas presently Electronic exchange of CoOs was not possible.

The new platform reduces transaction cost and time for the exporters while the current processes take more time and cost. Exporters may register on this platform and apply for CoOs to any of the designated agencies. EIC and its agencies are already on-boarded. Other agencies are in the process of registering on the platform.The on-boarding process is only for the purposes for payment integration so that the application fees may flow to the respective agencies.

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