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Guaranteed Emergency Credit Line (GECL) Facility Details

S.No.

Parameter

Guidelines

1

Name

  • ‘Emergency Credit Line Guarantee Scheme (ECLGS)’ (hereinafter referred as the ‘Scheme’) shall have components, ECLGS 1.0, ECLGS 2.0, ECLGS 3.0,& ECLGS 4.0 .

i. ECLGS-1.0 refers to the scheme for providing 100% Guarantee to Bank in respect of eligible credit facility extended by it to its borrowers whose total credit outstanding (fund based only) across all lending institutions and days past due as on February 29, 2020 was upto Rs.50 crore and upto 60 days respectively.

ii. ECLGS-2.0 refers to the scheme for providing 100% Guarantee to Bank in respect of eligible credit facility extended by them to its borrowers in the 26 sectors (attached as Annexure I.) identified by the Kamath Committee on Resolution Framework vide its report dated 04.09.2020 and the Healthcare sector whose total credit outstanding (fund based only) across all lending institutions and days past due as on February 29, 2020 was above Rs.50 crore and not exceeding Rs.500 crore and upto 60 days respectively.

ii. ECLGS-3.0refers to the scheme for providing 100% Guarantee to Bank in respect of eligible credit facility extended by it to its borrowers in the Hospitality, Travel & Tourism, Leisure & Sporting and Civil Aviation (scheduled and non-scheduled airlines, chartered flight operators, air ambulances and airports) sectors whose days past due are upto 60 days as on 29.02.2020.

ii. ECLGS-4.0refers to the scheme for providing 100% guarantee to Bank in respect of eligible credit facility extended by them to its eligible hospitals/nursing homes/clinics/medical colleges for setting up of on-site oxygen producing plants;

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

2

Purpose

  • This is a special Scheme in view of COVID-19 crisis. It seeks to provide additional liquidity, thereby enabling Business Enterprises / MSMEs including PMMY borrowers to meet their operational liabilities and restart their businesses.
  •  To provide 100% guarantee coverage for the GECL assistance of loan outstanding as on 29th February, 2020 to eligible borrowers, in the form of additional term loan /working capital term loan facility (under ECLGS 1.0, 2.0 and 3.0 & 4.0) and/or non-fund based facility (under ECLGS 2.0 & 4.0)

3

Nature of Facility

Under ECLGS 1.0 & 3.0

  • Working Capital Term Loan

Under ECLGS 2.0 & 4.0

  • Working Capital Term Loan
  • Non fund based facility
  • Combination of both Fund + Non Fund

 

4

Eligible Borrower

  1. “Eligible borrower” under ECLGS 1.0
    • All Business Enterprises / MSMEs / individuals who have availed loan for business purposes with total credit outstanding (fund based only) across all lending MLIs of up to Rs.50 crore as on 29.2.2020.
    • 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.    
  2. “Eligible borrower” under ECLGS 2.0
    • All Business Enterprises/MSMEs in the 26 sectors identified by the Kamath Committee on Resolution Framework (attached as Annexure I) and the Healthcare sector who have availed loan for business purposes with total credit outstanding (fund based only), across lending institutions, above Rs.50 crore and not exceeding Rs.500 crore as on 29.02.2020.
    • To be eligible under ECLGS 2.0, the borrower accounts should be less than or equal to 60 days past due as on February 29, 2020.
  3. "Eligible borrower” under ECLGS 3.0
    • All Business Enterprises /MSMEs in the Hospitality (hotels, restaurants, marriage halls, canteens etc.), Travel & Tourism, Leisure & Sporting and Civil Aviation (including scheduled and non-scheduled airlines, chartered flight operators, air ambulances and airports) sectors whose days past due are upto 60 days as on 29.02.2020.
  4. “Eligible borrower” under ECLGS 4.0
    • Existing Hospitals/nursing homes/clinics/medical colleges having credit facility with a Bank with days past due upto 90 days as on March 31, 2021 and requiring assistance of upto Rs.2 crore for setting up low cost technologies like Pressure Swing Adsorption etc. for on site oxygen generation.
  5. However, exception has been allowed for overdues of the borrower in respect of their credit card/savings account/current account provided the said overdues did not exceed 1% of the loan amount (i.e. GECL amount) extended under the scheme and that the overdue amount was regularized prior to assistance being extended under the scheme and provided further that the Bank ensure that the overdues were covered by the materiality concept being followed by the Bank.
  6. For the purpose of this scheme, the term ‘Business Enterprises/MSMEs’ would also include loans covered under Pradhan Mantri Mudra Yojana (PMMY).
  7. ‘Guarantee Cover’ means the maximum cover available per eligible borrower of the amount in default in respect of the credit facility extended by the lending institution. For this Scheme, the guarantee coverage would be 100% of the amount in default. 

5

Quantum of Finance

  1. Under ECLGS 1.0
    • The amount of GECL funding to eligible borrowers in the form of additional working capital term loan facility would be up to 20% of their total credit outstanding up to Rs.50 crore (fund based only) as on 29th February, 2020, subject to the borrower meeting all the eligibility criteria.
  2. Under ECLGS 2.0
    • The amount of GECL funding to eligible borrowers either in the form of additional working capital term loan facility and / or non-Fund based facility or a mix of the two, would be up to 20% of their total credit outstanding (fund based only) up to Rs. 500 crore as on 29th February, 2020, subject to the borrower meeting all the eligibility criteria.
    • Credit facility under ECLGS 2.0 could be in the form of fund based or non-fund based facility or a mix of the two.
  3. Under ECLGS 3.0
    • The amount of GECL funding to eligible borrowers either in the form of additional working capital term loan facility would be up to 40% of their total credit outstanding (fund based only), subject to a cap of Rs.200 crore per borrower and the borrower meeting all the other eligibility criteria.
    • Such of the eligible borrowers, who are eligible under ECLGS 3.0 and have already availed benefit under ECLGS 1.0 or ECLGS 2.0 shall be eligible for additional credit upto 20% of their total credit outstanding as on 29.02.2020.
  4. Under ECLGS 4.0
    • The amount of GECL funding to eligible borrowers would be in the form of fund based (term loan) or non-fund based (LC for import of capital goods) facility and would be limited to Rs.2 crore per borrower.
    • The funding will be for setting up a low cost on-site oxygen generating plant.
  5. Total Outstanding Amount comprises of the on-balance sheet exposure such as outstanding amount across WC loans, term loans and WCTL loans. Off-balance sheet and non-fund based exposures will be excluded. 

6

Tenure

  1. Under ECLGS 1.0: The door to door tenor of loans provided under GECL shall be four years from the date of first disbursement.
  2. Under ECLGS 2.0: The door to door tenor of facilities provided under GECL shall be for a period of five years from the date of first disbursement of fund based facility or first date of utilization of non-fund based facility, whichever is earlier. To be eligible for guarantee cover of the sanctioned non-fund based facility, first utilization must happen on or before September 30, 2021.
  3. Under ECLGS 3.0: The door to door tenor of facilities provided under GECL shall be six years from the date of first disbursement.
  4. Under ECLGS 4.0: The door to door tenor of facilities provided under GECL shall be for a maximum period of five years from the date of first disbursement of fund based facility or first date of utilization of non-fund based facility, whichever is earlier. Last date of disbursement under fund based facility and utilization of LC under non-fund facility shall be December 31, 2021

7

Moratorium

  • Moratorium period of one year on the principal amount shall be provided to borrowers for the fund based portion of GECL credit under ECLGS 1.0 & 2.0 and 6 months for the fund based portion of GECL under ECLGS 4.0 during which interest shall be payable.
  • Moratorium period of 2 years on the principal amount shall be provided to borrowers for GECL facility (only fund based is allowed) under ECLGS 3.0, during which period interest shall be payable.

8

Disbursal & Repayment

  • The borrower account eligible under the scheme should not be an NPA as on the date of sanction / disbursement.
  • The last date of disbursement for fund based facility under the scheme (ECLGS 1.0, ECLGS 2.0, ECLGS 3.0 & ECLGS 4.0) shall be December 31, 2021.
  • No last date is there for the non-fund based facility, the branches should ensure to progressively reduce their liability under the non-fund based facility as the guarantee cover under the scheme for a particular borrower shall expire on completion of 5 years from the first date of utilization by the borrower under ECLGS 2.0 or December 31, 2026, whichever is earlier.
  • No pre-payment penalty in case of early repayment.
  • Interest shall, be payable during the moratorium period.
  • The principal shall be repaid in 36 monthly instalments under ECLGS 1.0, in 48 monthly instalments under ECLGS 2.0 and 3.0 and in maximum 54 monthly instalments under ECLGS 4.0, after the moratorium period is over.
  • The facility will be considered as an exposure on the borrower and guidelines stipulated under the RBI Prudential Norms shall be adhered to.

9

Margin

  • NIL for funded facility under ECLGS. However, margin for the existing limits will continue as per the sanctioned terms
  • In case of Non-funded facility under ECLGS 2.0: The margin should be as per existing non-funded facility.
  • In case, there is no existing non-funded facility, the margin of 25% should be taken (only for non-funded portion of ECLGS 2.0).

10

Rate of Interest / commission for Non-Funded facility

Rate of Interest

For ECLGS 1.0, ECLGS 2.0 & ECLGS 3.0

  1. MSMEs
    • Linked to RLLR, subject to a minimum RoI of 7.5% and a maximum up to 9.25%. (During the entire tenure of this loan facility).
  2. Non- MSMEs
    • MCLR + spread of 0.20% to 1% to be decided by the sanctioning authority on case to case basis (subject to a minimum RoI of 7.5% and a maximum up to 9.25% during the entire tenure of this loan facility).

For ECLGS 4.0

  • Linked to RLLR/MCLR with maximum Cap at 7.5% pa
  • Interest to be served as and when applied.
  • Penal interest as per extant Bank’s guidelines would be charged for default in payment of installments & interest within stipulated time period.
  • No penal interest due to any non-compliance of the already accepted covenants on the existing credit facilities may be charged on this product during the sanction time.

Commission on Non-Funded Facility:

  • In case of existing non-fund facility: Charges as per existing sanction.
  • In case of fresh sanction of non-fund facility: As per extant guidelines of service charges.

11

Security

  • The additional WCTL or non-fund based facility granted under ECLGS 1.0 or 2.0 or 3.0 or 4.0 shall rank second charge with the existing credit facilities in terms of cash flows (including repayments) and security, with charge on the assets financed under the Scheme to be created on or before September 30, 2021 or date of NPA, whichever is earlier. 
  • The stipulation of second charge has been waived in respect of all loans up to Rs.25 lakh (outstanding as on February 29, 2020 plus loan sanctioned under GECL), subject to Bank ensuring to safeguard the interests of NCGTC. Extension of any guarantee or obtaining of any fresh guarantee will make the guarantee cover provided by NCGTC under the scheme void. (Ref. attached FAQ, Q.56)

12

Collateral

No additional collateral shall be asked for additional credit extended under this scheme.

13

Scheme Validity

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 30.09.2021 or till guarantees for an amount of Rs 3,00,000 crore  are issued (taking into account ECLGS 1.0, 2.0 3.0 & 4.0), whichever is earlier.

The last date of disbursement for fund based facility under the scheme (ECLGS 1.0, ECLGS 2.0, ECLGS 3.0 & ECLGS 4.0) shall be December 31, 2021.

Facility under non-fund based portion can be availed during the 5-year tenor of facility sanctioned provided the first tranche has been utilized on or before December 31, 2021 under ECLGS 2.0. Utilization of entire non-fund based facility (LC for import of capital goods) under ECLGS 4.0 should happen on or before 31.12.2021 even though they may be crystallizing later.  (Ref. attached FAQ, Q.123)

14

Guarantee Coverage

  • The National Credit Guarantee Trustee Company Limited (NCGTC) shall provide 100% Guarantee coverage on the outstanding amount for the credit facility provided under the Scheme as on the date of NPA or on the date of lodgment of claim, whichever is lower.
  • Credit Guarantee from NCGTC would be unconditional and irrevocable.
  • Once Bank enters the details of the loan sanctioned to an eligible borrower as per the scheme guidelines, the system shall approve the guarantee automatically and will provide Application Reference No. and Credit Guarantee Number to the Bank, which shall be used by the Bank for later references.
  • No documents are sought at the time of application lodgment of guarantee, except in the case of individual loans where a management certificate certifying that the original loan was for business purposes.

15

Guarantee Fee

No Guarantee Fee for all credits facilities provided

under this scheme

16

Processing Fee

Nil

17

Prepayment Charges

Nil

18

Documentation/Other Charges

As per extant guidelines of Bank

 

26 sectors identified by the Kamath Committee on Resolution Framework

Sr. No.

26 sectors identified by the Kamath Committee on Resolution Framework vide its report dated 04.09.2020

1

Auto Components

2

Auto Dealership

3

Automobile Manufacturing*

4

Aviation**

5

Building Materials - Tiles

6

Cement

7

Chemicals

8

Construction

9

Consumer Durables / FMCG

10

Corporate Retails Outlets

11

Gems & Jewellery

12

Hotel, Restaurants, Tourism

13

Iron & Steel Manufacturing

14

Logistics

15

Mining

16

Non Ferrous Metals

17

Pharmaceuticals Manufacturing

18

Plastic Products Manufacturing

19

Port & Port Services

20

Power

  • Generation
  • Transmission
  • Distribution

21

Real Estate

  • Residential
  • Commercial

22

Roads

23

Shipping

24

Sugar

25

Textiles

26

Trading – Wholesale