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Emergency Credit Line Guarantee Scheme (ECLGS)

Emergency Credit Line Guarantee Scheme (ECLGS) Operational Guidelines

  1. Name of the Scheme:  

The Scheme shall be named as ‘Emergency Credit Line Guarantee Scheme (ECLGS)’ (hereinafter referred as the ‘Scheme’) and the credit product for which guarantee would be provided under the Scheme shall be named as ‘Guaranteed Emergency Credit Line (GECL)’

2. Purpose of the Scheme:  

To provide 100% guarantee coverage for the GECL, which shall be a pre-approved sanction limit of up to 20% of loan outstanding as on 29th February, 2020 to eligible borrowers, in the form of additional working capital term loan facility (in case of banks and Financial Institutions), and additional term loan facility (in case of NBFCs) from all Member Lending Institutions (MLIs) to eligible Business Enterprises / Micro, Small and Medium Enterprise (MSME) borrowers, including interested PMMY borrowers , in view of COVID-19 crisis, as a special Scheme.

3. Date of commencement

Scheme shall come into force from the date of issue of these guidelines by NCGTC.

4. Definitions

For the purposes of this Scheme –

SCOPE AND EXTENT OF THE SCHEME

5. Eligible MLIs

6. Duration

• The Scheme would be applicable to all loans sanctioned under GECL during the period from the date of issue of these guidelines by NCGTC to 31.10.2020, or till an amount of Rs 3,00,000 crore is sanctioned under the GECL, whichever is earlier.

7. Eligible Borrowers

Name of the BorrowerOverall Outstanding of the Borrower across MLIs (INR Crore)Overall Outstanding of the Borrower with MLI (INR Crore)DPD of borrower as on 29th Feb 2020 (Days)Turnover as per latest available financials (INR Crore)
Borrower A30153090Not eligible
Borrower B30156290Not eligible
Borrower C25255975Eligible
Borrower D1510080Eligible
Borrower E20100125Not Eligible

8. Loan Amount eligible under the Guarantee Coverage

Name of the BorrowerOverall Outstanding of the Borrower across MLIs (INR Crore)Overall Outstanding of the Borrower with MLI  (INR Crore)Total Maximum Loan Amount allowed under the scheme (INR Crore)Total Maximum Loan Amount allowed without NOC for MLI (INR Crore)
 ABC= 20% of AD= 20% of B
Borrower A201543
Borrower B5210.4
Borrower C252555
Borrower D151032

9. Interest Rate of Credit under the Scheme

Interest Rate on GECL shall be capped as under:

10.    Nature of account and Tenor of Credit under the Scheme

11.     Security 

12.     Guarantee Fee

• No Guarantee Fee shall be charged from the MLIs by NCGTC for the Credit facilities provided under the Scheme.  

13.     Extent of the Guarantee Coverage

• The Trustee Company shall provide 100% Guarantee coverage on the outstanding amount for the credit facility provided under the Scheme as on the date of NPA.

14.     Definition of Default

• The definition of default for borrowers shall be as per the instructions and guidelines issued by the Reserve Bank of India from time to time under extant norms on income recognition, asset classification and provisioning.

15.     Invocation of guarantee

16.      Appropriation of amount realized by the lending institution in respect of a credit facility after the guarantee has been invoked

Post invocation of the guarantee claim, if any recoveries are made in the account, MLIs shall first adjust such recoveries towards the legal costs incurred by them for recovery of the amount and shall thereafter remit to NCGTC the balance recoveries.  

17.    Agreement to be executed by the lending institution 

18.    Responsibilities of lending institution under the Scheme:

Lending Institutions shall provide certain data points on a fortnightly basis to Trustee Company to enable Trustee Company to track the outreach and impact of the Scheme. The indicative data points required shall be as follows

19.     Modifications in the Scheme

Any changes to the current structure of the Scheme, including but not limited to the eligibility criteria, guarantee fee, rate of interest and tenor of GECL under the Scheme, shall be decided by the Management Committee for the ECLGS Fund.

Source

Also Read: MSME- Emergency Credit Line Guarantee Scheme, ECLGS -Modification in Operational Guidelines

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