NIRVIK scheme: Features & Benefits, Eligibility, Documents

NIRVIK scheme (Niryat Rin Vikas Yojana) was introduced in Union budget 2020-21 to boost the export segment of the Indian economy. It is implemented under Export Credit Guarantee Corporation of India (ECGC). It main objective is to provide small scale exporters the benefit of enhanced credit availability, high insurance coverage with affordable insurance premiums.

What is NIRVIK scheme?

NIRVIK scheme is an initiative by government of India to help small scale exporters expand their business. It offers insurance coverage for all kinds of small scale exports and credit guarantees to these exporters. It also helps in reducing the insurance premiums for small scale exporters.

Features of NIRVIK scheme

• Provide insurance cover up to 90% of the principal and interest amount.
• Insurance will cover pre-shipment and post-shipment credit.
• It will ensure that credit interest rates are below 4% and interest rates for the rupee are limited to 8%.
• Borrowers of jewellery, gems and diamond with amount exceeding ₹ 80 crore will have a higher premium rate than those from other sectors because the loss ratio is high.
• A premium of interest of 0.60 per annum will be charged from exporters having account limits of ₹ 80 crore.
• A premium of interest of 0.80 per annum will be charged from exporters having account limits much higher than ₹ 80 crore.
• ECGC will inspect the exporter in case export incurs the losses exceeding ₹ 10 crores in value. In the meantime, the bank will pay the monthly premium to the ECGC and the interest amount will be deemed to be outstanding.

Benefits of NIRVIK scheme

• It will assist small scale exporters increase their export and provide high credit disbursements.
• It offers more liquidity because of instant claim settlements and availability of continuous working capital.
• It facilitates small scale Indian exporters to be competitive in International and Indian markets.
• It limits foreign and domestic exchange rates to 4% and 8% respectively.
• It provides insurance coverage resulting in lower amount of insurance premiums to small scale exporters.
• A healthy work environment and a healthy business in the export sector will provide job opportunities in the nation.

Reasons to register for NIRVIK scheme

• Exporters can avail any kind of best business loan at an affordable interest rate.
• Accounts with a maximum limit of ₹ 80 crores will bear the insurance premium at 0.60% per annum and the accounts over ₹ 80 crores will bear the insurance premium at 0.80% per annum.
• A high insurance coverage of up to 90% of principal and interest amount can be granted.
• Exporters will benefit from the lower Forex rate of up to 4% and 8%.

Eligibility criteria to apply for NIRVIK scheme

• The scheme can only be availed of by small-scale businesses.
• The owner of the export business must be a citizen of India.
• Export businesses must have an active bank account in India.

Documents required for applying for NIRVIK scheme

• Valid identity proof like aadhar card, passport etc.
• Business registration document to prove that the business is legitimate and the applicant is the actual owner of the business.
• Business PAN Card which is under the name of the export company.
• GST certificate of the business.
• All documents related to the insurance policies of the owner and the company.
• If the owner has an active bank loan then he needs to furnish all the documents related to the existing loan.

Conclusion

NIRVIK scheme was introduced to help facilitate small scale exporters to expand their business. It provides insurance coverage and provides insurance at affordable and attractive premium rates. It also limits the exchange rates.

Frequently Asked Questions

1. What is NIRVIK scheme?

It is a scheme by Government of India to enhance the credit availability to small scale exporters and spread their business.

2. What is the scheme launched by ECGC?

NIRVIK (Niryat Rin Vikas Yojana)