Insurance Cover for Buyer’s Credit And Line of Credit

Buyer’s Credit is a credit extended by a bank in India to an overseas buyer enabling the buyer to pay for machinery and equipment that he may be importing from India for a specific project. A Line of Credit is a credit extended by a bank in India to an overseas bank, institution or government for the purpose of facilitating import of a variety of listed goods from India into the overseas country. A number of importers in the overseas country may be importing the goods under one Line of Credit.

ECGC has evolved schemes to protect the lending banks from certain risks of non-payment. These covers take the form of an agreement between the lending bank and ECGC and are issued on a case to case basis. Credit terms and the length of the credit period should be in conformity with what is appropriate for the export of the relevant items. There should be adequate security for the repayments to be made by the borrower.

Risks Covered:


  • The occurrence of war between the country of the overseas party and India.
  • The occurrence of war, hostilities, civil war, revolution, rebellion, insurrection or other disturbances in the country of overseas party.
  • The operation of law or of an order, decree or regulation having the force of law which in circumstances outside the control of the lender and/or the overseas party, prevents, restricts or controls, the transfer of the sums due to the lender by the overseas party under the Financial Agreement.


The risk of protracted default of the borrower to pay the amounts due under the loan agreement and insolvency of the borrower.

Loss Coverage:


Period of Cover:

As per the agreement.


  • Seek in principal approval prior to signing of agreement
  • Advise disbursement and repayment schedule
  • Inform overdue payments
  • Filing of claim
  • Recovery action after payment of claim and sharing of recovery.