New India teams with Canara Bank to boost Domestic Trade

New India Assurance the largest general insurer of the country, who have pioneered credit insurance for the domestic market have paved way for availability of the benefits of bill discounting/purchasing facility for the business through banks at competitive interest rates.

Channel financing carried by some of the banks in India to provide the benefits of bill-discounting facilities to large corporate bodies for the credit sales, will now get a boost. Small debtors located countrywide, who otherwise would find it difficult individually to get easier credit terms from banks, will now get the facility at a much competitive rate when bunched and channeled under one umbrella through the channel financing model. While the seller gets the payment immediately on the invoice from the bank directly, the insurer provides the necessary comfort and vetting of the trade debts, and compensates the Bank in case of any default by the debtor. It is a win-win situation for all the parties, as, while the seller gets timely payment at no additional cost boosting his sales, the debtor gets easier interest rates with enhanced business to banks and insurance company.

New India Assurance signed an MOU with Canara Bank, wherein the clients of the bank will have the option to avail an insurance cover ‘Business Credit Shield’. It covers the credit risk of the suppliers related to the perils of ‘insolvency’ and ‘protracted default’ of the buyers approved by New India. The cover will be given to the corporate clients, the benefits of which will be assigned to the bank.

It is also possible to issue covers to the Banks directly, wherein their clients while will get a competitive net consolidated interest rate inclusive of the premium, the ‘Business Credit Shield’ would operate behind the scene.