NCGTC Emergency Credit Line Guarantee Scheme (ECLGS)

Organisation : NCGTC
Facility Name : Emergency Credit Line Guarantee Scheme (ECLGS)
Applicable For : MLIs & NBFCs, Borrowers
Website : https://www.eclgs.com/

What is Emergency Credit Line Guarantee Scheme (ECLGS)?

The Scheme shall be named as ‘Emergency Credit Line Guarantee Scheme (ECLGS)’ and the credit product for which guarantee would be provided under the Scheme shall be named as ‘Guaranteed Emergency Credit Line (GECL)’. To provide 100% guarantee coverage for the GECL, which shall be a pre-approved sanction limit of up to 20% of loan outstanding to eligible borrowers.

Related / Similar Scheme : ACABC Agri Clinic and Agribusiness Centres Scheme

Eligibility

Eligible MLIs
** MLIs for this purpose shall include all Scheduled Commercial Banks (SCBs), Non- Banking Financial Companies (NBFCs) and Financial Institutions (FIs), as specified above.
** All NBFCs which have been in operation for 2 years as on 29th February, 2020 would be eligible under the Scheme.

Eligible Borrowers
** All Business Enterprises /MSME borrower accounts with combined outstanding loans across all MLIs of up to Rs. 25 crore as on 29.2.2020, and annual turnover of up to Rs. 100 crore for FY 2019-20 are eligible for the Scheme.
** MLIs are expected to check with credit bureau the overall outstanding of the borrower to assess the eligibility of the borrower.
** Loans provided to Business Enterprises / MSMEs constituted as Proprietorship, Partnership, registered company, trusts and Limited Liability Partnerships (LLPs) shall be eligible under the Scheme.
** For instance, any existing loan such as CV loan taken by an entity shall be covered but CV loan taken by promoter or director in personal capacity shall not be covered.
** For the purpose of this Scheme, Business Enterprises / MSMEs would include loans covered under Pradhan Mantri Mudra Yojana extended on or before 29.2.2020, and reported on the MUDRA portal.
** All eligibility conditions including the condition related to Days past due would also apply to PMMY loans.
** For loans having co-applicant, only those existing loans where entity is the primary co-applicant are covered under the Scheme for additional emergency funding.
** Loans provided in individual capacity are not covered under the Scheme.
** The Scheme is valid for existing customers on the books of the MLIs. Borrower accounts should be less than or equal to 60 days past due as on 29th February, 2020 in order to be eligible under the Scheme.
** All borrowers which have not been classified as SMA 2 or NPA by any of the MLIs as on 29th February, 2020 will be eligible for the Scheme
** Days Past Due status as on 29.2.2020 to be checked across MLIs from credit bureau.
** Business Enterprises / MSME borrower accounts which had NPA or SMA-2 status as on 29.2.2020 shall not be eligible under the Scheme.
** Business Enterprises / MSME borrower must be GST registered in all cases where such registration is mandatory.
** This condition will not apply to Business Enterprises / MSMEs that are not required to obtain GST registration.
** An ‘opt-out’ option should be provided to the eligible Business Enterprises / MSME borrowers to enable them to choose whether they wish to opt out of the GECL facility

Duration of Emergency Credit Line Guarantee Scheme

The Emergency Credit Line Guarantee 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.

Interest Rate of Credit under the Scheme

Interest Rate on GECL shall be capped as under:
** For Banks and FIs, lending rate linked to one of the external benchmark rates prescribed by RBI +1% subject to a maximum of 9.25% per annum.
** For NBFCs, the interest rate on GECL shall not exceed 14% per annum.
** Since the additional pre-approved facility is to be provided to existing customers, no additional processing fee shall be charged by MLIs to borrowers.
** No penal interest due to any non-compliance of the already accepted covenants on the existing credit facilities may be charged on additional loans during the sanction time.

Guarantee Fee

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

Modifications in the Emergency Credit Line Guarantee Scheme

Any changes to the current structure of the Emergency Credit Line Guarantee 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 Fun