NEW DELHI: The authorities on Saturday widened the scope of the Rs 3-lakh crore MSME credit score assure scheme by doubling the higher ceiling of loans excellent to Rs 50 crore and together with sure particular person loans given to professionals like medical doctors, legal professionals and chartered accountants for enterprise functions underneath its ambit.
The tweaking of the Emergency Credit Line Guarantee Scheme (ECLGS)was accomplished based mostly on demand from commerce our bodies and according to new MSME definition accepted by the Union Cabinet in June.
Briefing the media in regards to the adjustments made, finance minister Nirmala Sitharaman mentioned the scheme will now embody particular person loans given for enterprise functions throughout the ambit of the ECLGS, topic to the eligibility standards of the scheme.
“We have also decided to cover individual loans given to doctors, chartered accountants for business purposes under the scheme,” Financial Services Secretary Debasish Panda mentioned.
Similar process as with regard to firms could be adopted to sanction loans to those professionals working their enterprise, he mentioned.
To embody extra firms to take good thing about the scheme, he mentioned, it has been determined to extend the higher ceiling of loans excellent as on February 29 for being eligible underneath the scheme from Rs 25 crore to Rs 50 crore.
The most quantity of assured emergency credit score line (GECL) funding underneath the scheme would additionally correspondingly improve from Rs 5 crore at current to Rs 10 crore, he mentioned.
Announced as a part of the Rs 20.97 lakh crore authorities financial bundle to sort out the influence of COVID-19, the scheme will now be relevant for firms with an annual turnover of Rs 250 crore as in opposition to the sooner Rs 100 crore.
Banks and non-banking monetary firms (NBFCs) have accepted loans price about Rs 1.37 lakh crore whereas disbursement stood at Rs 87,227 crore on the finish of July 29.
“Smaller companies were sufficiently covered under the scheme, so we wanted to include larger companies as well,” Panda mentioned.
The total ceiling for the scheme stays at Rs Three lakh crore and the validity of the scheme is until October, he added.
The finance minister mentioned that the supposed adjustments are prone to develop the ambit of ECLGS to make a further quantity of greater than Rs 1 lakh crore eligible underneath the scheme.
On May 20, the Cabinet accepted further funding of as much as Rs Three lakh crore at a concessional price of 9.25 per cent via ECLGS for the MSME sector.
Under the scheme, 100 per cent assure protection shall be supplied by the National Credit Guarantee Trustee Company for added funding of as much as Rs Three lakh crore to eligible MSMEs and Micro Units Development and Refinance Agency debtors within the type of a assured emergency credit score line (GECL) facility.
For this goal, a corpus of Rs 41,600 crore was arrange by the federal government, unfold over the present and subsequent three monetary years.
The scheme shall be relevant to all loans sanctioned underneath the GECL facility through the interval from the date of announcement of the scheme to October 31 or until the quantity of Rs Three lakh crore is sanctioned underneath GECL, whichever is earlier.
All MSME borrower accounts with an impressive credit score of as much as Rs 50 crore as on February 29, which have been lower than or equal to 60 days overdue as on that date, ie, common, SMA-Zero and SMA-1 accounts, and with an annual turnover of as much as Rs 250 crore, are eligible for GECL funding underneath the scheme.
Sharing particulars of different schemes introduced underneath the ‘Aatmanirbhar Bharat Abhiyan’ bundle, Panda mentioned banks have sanctioned about Rs 90,000 crore to about 1.1 crore Kisan Credit Card (KCC) holders to assist farmers meet funds for kharif sowing and allied actions.
As a part of the Rs 20.97 lakh crore stimulus bundle, the federal government had introduced Rs 2 lakh crore of concessional credit score via KCC to 2.5 crore farmers, together with fishermen and people concerned in animal husbandry.
Public sector banks (PSBs) have bought bonds and business papers price Rs 18,000 crore issued by NBFCs and housing finance firms underneath the revamped Partial Credit Guarantee Scheme (PCGS).
Besides, bonds and NCDs price Rs 5,800 crore are underneath strategy of approval, Panda added.
The Union Cabinet on May 20 accepted the sovereign portfolio assure of as much as 20 per cent of the primary loss for buy of bonds or business papers with a score of AA and beneath together with unrated paper with authentic or preliminary maturity of as much as one yr issued by NBFCs/HFCs/MFIs by public sector banks via an extension of PCGS.
The Cabinet additionally prolonged the time interval of the scheme from June 30, 2020, to March 31, 2021, for buy of pooled property of the distressed entities.