Table of Contents
What has happened?
- The Finance Ministry on Thursday said banks have sanctioned loans of about Rs 1.86 lakh crore to 50 lakh business units,
- Under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector,
- Impacted by slowdown due to the coronavirus pandemic.
- Over 27 lakh MSME units have received about Rs 1,32,246 crore till September 29.
- By 12 Public Sector Banks, top 24 Private Sector Banks & 31 NBFCs.
- The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package, announced by Finance Minister Nirmala Sitharaman in May
- To mitigate the distress caused by the lockdown due to COVID-19 by providing credit to different sectors, especially micro, small and medium enterprises (MSMEs).
What is Emergency Credit Line Guarantee Scheme?
- Under the scheme, 100% guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC)
- For additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested MUDRA borrowers,
- In the form of a guaranteed emergency credit line (GECL) facility.
- For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years.
- Legislative amendments to give effect to this announcement was incorporated in The Taxation and Other Laws (Relaxation and Amendment of Certain provisions) Bill, 2020, which was introduced in the Lok Sabha on September 18, 2020.
Progress of other schemes under Aatmanirbhar Bharat Abhiyan package
- With regard to Rs 30,000 crore Special Liquidity Scheme for the stressed non-bank financial companies (NBFCs)/ housing finance companies (HFCs)/ microfinance institutions (MFIs),
- 39 proposals involving an amount of Rs 11,120 crore have been approved.
- Also banks have approved the purchase of portfolio of Rs 25,505 crore, and Rs 45,000 crore Partial Credit Guarantee Scheme 2.0
- For NBFCs, HFCs and MFIs to do fresh lending to MSMEs and individuals as on September 25.
- The statement also said that for furthering enhancement of ease of doing business through Insolvency and Bankruptcy Code related measure,
- The government has raised the threshold of default under section 4 of the IBC, 2016 to Rs 1 crore from the existing threshold of Rs 1 lakh in June.
Q) Which of the following statements regarding National Credit Guarantee Trustee Company (NCGTC) are correct?
1- NCGTC is a private limited company incorporated in the year 2014.
2- It is wholly owned company of GOI under Ministry of Finance.
3- At present there are 5 credit guarantee Trusts under the NCGTC.
- 1 & 2 only
- 2 & 3 only
- 3 only
- All of the above
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