Guaranteed Emergency Credit Line (GECL) 2.0 Scheme
Government of India and RBI has taken various measures for combating the challenges faced by the Indian economy due to COVID-19 crisis. As part of relief measure Department of Financial Service has introduced the Emergency Credit Line Guarantee Scheme (ECLGS) for providing 100% guarantee coverage for additional working capital term loans to eligible borrowers. In line with the guidelines of ECLGS scheme, a new product KBL- GECL (Guaranteed Emergency Credit Line) has been introduced by our Bank to provide additional Working Capital term Loan (WCTL) facility to COVID affected borrowers. The key highlights of the scheme are as follows:
- All MSME/Business enterprises borrowers and loan sanctioned to individuals for specific business purpose (eligible 26 sectors identified by Kamath Committee + Health Care sector) with outstanding fund based credit up to Rs. 500.00 Crore across all MLIs as on 29.02.2020.
- For the purpose of the scheme, Business Enterprises/MSMEs/individuals would also include loans covered under PMMY Scheme.
- Scheme is eligible for existing customers in the book of the Bank.
- Borrower accounts (our Bank/Other banks/FIs/NBFCs) should be less than or equal to 30 days past due as on 29.2.2020. Borrowal accounts which are NPA, SMA-1 or SMA-2 status as on 29.2.2020 shall not be eligible under the scheme.
- Exception to the above is allowed for overdue in respect of credit card/savings/current account subject to
- Overdue shall not exceed 1.00% of the eligible GECL loan limit.
- Overdue amount shall be regularized and request for GECL shall be submitted along with receipt/acknowledgement for regularization of overdue.
- Working Capital Term Loan(FB limit):
- 5 years with moratorium period of 1 year on the principal amount.
- Non Fund Based Limits:
- Nil moratorium and limits shall be amortised over the period of loan (i.e., maximum tenure of 5 years) on progressive basis with minimum amortisation of 20% each year.
- Note:
- First Tranche of sanctioned Non Fund Based facility shall be utilised on or before 30.06.2021 or else said sanction shall be stands cancelled.
- Due date of non fund based facilities shall be after 5 years from the date of first disbursement/utilization out of the sanctioned fund based/non fund based facility whichever is earlier.
- Primary charge on the assets financed (wherever applicable)
- Pari Passu charge on existing securities as well as cash flows of repayment
- Existing prime and collateral securities shall be continued for proposed facility.
- No additional/fresh collateral security required.
- Repayable in 48 monthly installments after initial moratorium period of one year (12 months) on the principal amount. Interest to be serviced by the borrower as and when applied (including during the moratorium period)
- Nil
Fund Based Facilities:
- MSME Borrowers:
- 8.96% p.a. i.e., External Bench Mark - 10 year G-sec (presently 6.21%) plus KBL spread of 2% plus 0.75%; with a maximum cap of 9.25% p.a.
- Non MSME Borrowers:
- 3 months/6 months/One Year MCLR + spread with a maximum cap of 9.25%
- MCLR and EBLR will be reset on periodical basis.
Non Fund Based Facilities:
- As per the service charge circular of our bank
Purpose:
- To mitigate economic distress being faced by MSMEs/Business Enterprises (eligible 26 sectors identified by Kamath Committee + Health Care sector) due to COVID-19 pandemic.
Facility Type:
- Fund Based Facility: Working Capital Term Loan
- Non Fund Based Facilities: Inland/Import LC (DP/DA)/Bank Guarantee/Forward Contract Facility etc.Or a mix of both fund based and non fund based facilities
Eligible Entities:
- Proprietorship, Partnership, Registered Company, Trusts, Limited Liability partnerships in 26 Sectors identified by Kamath Committee on Resolution Framework for COVID 19 related stress (furnished in Annexure III) and Health Care SectorLoans sanctioned to individuals are not covered under the Scheme.
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.
- For NCGTC Guidelines please visit https://www.eclgs.com
Charges:
- Processing Charges - Nil
- Prepayment Charges - Nil
- No penal interest to be charged for proposed facility due to any non compliance of the previous sanction terms & conditions. However penal interest of 5% will be charged for overdue instalments or interest for proposed working capital term loan.
Limit of Advance:
- Limit would be up to 20% of their entire outstanding credit under Fund Based exposure up to Rs. 500.00 Crore with all money lending institution as on 29.02.2020, subject to maximum of Rs. 100.00 Crore.
- Note: NOC from other MLIs shall be submitted if the borrower is willing to avail the entire eligible GECL limit with our bank.
Validity of the Scheme:
- The scheme will be in force up to 31.03.2021 or till the guarantee for an amount of Rs.3,00,000 Crore (as announced by Finance Ministry under COVID-19 Economic package) is sanctioned under GECL, across all eligible MLIs (Money Lending Institutions) whichever is earlier.
Disbursal:
- A separate loan account shall be opened and the borrower can avail the sanctioned amount in one go. The facility shall be made available as Fund Based Limit Only.
Documentation:
- As applicable for Working Capital Term Loans and non fund based working capital limits
General guidelines:
- Business Enterprises/MSME borrower must be GST registered in all cases except where it is exempted from GST registration
- Borrower has to submit the details of outstanding balance as on 29.02.2020 I the fund based facilities from the entire Money Lending Institutions duly certified by the Chartered Accountant.
- Valid LEI Code is mandatory for non individuals
For further details on the GECL product, please contact the nearest Branch
