[march][IMP Covid time scheme]Emergency Credit Line Guarantee Scheme (ECLGC) Flashcards
What?
is a loan facility for which 100% guarantee would be provided by National Credit Guarantee Trustee Company (NCGTC) to Banks/NBFCs/Financial Institutions for lending to MSMEs
To whom?
MSMEs/Pradhan Mantri Mudra Yojana borrowers/Self employed/ Professions who have taken loans for business purposes.
Elligibility?
- those who have already borrowed (till 29th Feb 2020) but have not been able to repay and their outstanding (yet to be paid) loan is less than Rs. 50 crore and their Turnover (annual sales) is less than 250 crores.
- august 2020,government doubled upper ceiling of loans outstanding i.e. 50 crore che 100 crore jhale mhnje
- including certain loans given to professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.
Limits on borrowing?
The maximum the businessmen can borrow is up to 20% of the outstanding loan. (For ex, if some business had borrowed Rs. 60 crore and the amount that is yet to be repaid is Rs. 40 crores then they can borrow Rs. 8 crores (20% of Rs. 40 crore)
Government & NCGTC
Government will pay Rs. 41,600 crore to NCGTC to provide guarantee on loans worth maximum Rs. 3 lakh crore (as all the loans will not be default, so Rs. 41,600 crore may be sufficient to provide guarantee for Rs. 3 lakh crore loan). NCGTC will not charge anything from lending institutions to provide guarantee.
Feature?
It is a pre-approved loan (you will be asked to take loan and if u don’t want you can opt out) and hence no processing charges and no collateral will be required from the borrowers.
What is National Credit Guarantee Trustee Company (NCGTC)?
- company registered under Company’s Act 2013
- Govt company under Department of Financial Services, Ministry of Finance.
What is Term Loan?
A loan that is repaid in regular payments over a set period of time. Its basically a long term loan which can last between one year to 10 years or may be more than that.
What is Working Capital Loan
A loan that is taken to finance a company’s day to day operations. These loans are not used to buy long-term assets or investments.
Update : Apr 1
- Extended by another three months till June 30
- widened its scope to new sectors, including hospitality, travel and tourism
Details
-ECLGS 3.0 would involve extending credit of up to 40% of total credit outstanding across all lending institutions as on February 29, 2020 -> Mhnje ajun payment na kelelya paiki 40% paryant payment sathi loan milel
tenor of loans granted under ECLGS 3.0?
6 yrs ; moratorium period of 2 years.
Features
- credit provided in form of Guaranteed Emergency Credit Line (GECL) facility.
- No Guarantee Fee charged by NCGTC from the Member Lending Institutions
Interest rates?
- 9.25% for banks and FIs
- 14% for NBFCs.
What is GECL facility?
The GECL is a loan for which 100% guarantee is provided by the National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) - banks, financial institutions and Non-Banking Financial Companies (NBFCs). -> Mhnje jar loan repay kela nahi tar MLIs la jababdar NCGTC rahil.
