Macro Economy

FM to meet bank chiefs to review schemes under Aatmanirbhar Bharat package

KR Srivats New Delhi | Updated on August 31, 2020

Union Finance Minister Nirmala Sitharaman   -  PTI

Progress of CGSSD, ECLGS and PCGS 2.0 will also be reviewed on Thursday

The review meeting to be taken up by the Finance Minister Nirmala Sitharaman with bank chiefs on Thursday will discuss schemes rolled out under the ₹20-lakh crore Aatmanirbhar Bharat package, besides the recent RBI announced one-time asset restructuring facility in view of Covid-19.

On the anvil is review of the ₹3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS); Credit Guarantee Scheme for Subordinate Debt (CGSSD) and the Partial Credit Guarantee Scheme (PCGS) 2.0 for NBFCs/HFCs/MFIs, sources said.

The Finance Minister will review the progress of ECLGS scheme and challenges in its implementationand also identify borrowers who become eligible after the recent amendments, contact and extend credit to them expeditiously, sources said. The government had recently expanded the ambit of the ECLGS to include individuals; hiked the upper ceiling of outstanding loans under the scheme from ₹25 crore to ₹50 crore and hiked the turnover ceiling to ₹250 crore from ₹100 crore.

ECLGS, which was rolled out as part of Aatmanirbhar Bharat Package to provide credit support to small and medium enterprises, had recently achieved a milestone of total loan sanctions crossing ₹1.5 lakh crore and disbursements crossing the ₹1 lakh-crore mark.

With regard to the recent RBI announced one-time restructuring facility in view of Covid-19 with asset classification, the meeting will discuss enabling businesses and households to avail themselves of the revival framework on the basis of viability; progress regarding finalising bank policies; identification of eligible borrowers and expeditious initiation of the process.

While chief executives of public sector banks, private sector banks and NBFCs have been invited to participate in the above two segments, for review of progress of Partial Credit Guarantee Scheme ( PCGS) 2.0 for NBFCs/ HFCs/MFIs, only chief executives of public sector banks have been invited, sources said. Both public sector banks and private sector banks are expected to participate in the review of the progress of Credit Guarantee Scheme for Subordinated Debt (CGSSD).

The main objective of CGSSD scheme is to facilitate loans (personal loan) through banks to the promoters of stressed MSMEs for infusion as equity/ quasi-equity in the business eligible for restructuring according to the RBI guidelines. The maximum sub-debt eligible under the scheme is equivalent to 15 per cent of his/ her existing stake (equity plus debt) or ₹75 lakh, whichever is lower, per the last balance sheet.

Published on August 31, 2020

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