The document discusses various funding options available to MSMEs, including under the COVID-19 stimulus package. It provides details on the Emergency Credit Line Guarantee Scheme (ECLGS), including the purpose, eligibility criteria, nature of accounts covered, and tenor of credit. Under ECLGS, MSME borrower accounts with combined outstanding loans across all lenders of up to Rs. 25 crore as of February 29, 2020 are eligible for collateral-free loans of up to 20% of their credit outstanding. A one-year moratorium is provided on principal repayment.
The document summarizes various components of India's economic stimulus packages announced to support businesses, farmers, and workers impacted by COVID-19. It discusses collateral-free loans for MSMEs, equity support for stressed MSMEs, increased liquidity support for NBFCs and DISCOMs, expanded public works programs to employ returning migrant workers, and increased agriculture support through loans and infrastructure development funds. The packages total over Rs. 20 lakh crore and aim to provide liquidity, credit, and job support across key economic sectors battered by the pandemic.
The document discusses priority sector lending in India. It defines priority sectors as agriculture, small scale industries, and other identified sectors of economic importance. It provides details on categories of lending covered under priority sectors such as short term crop loans, medium and long term agriculture loans, small scale industry loans, and loans to weaker sections. It also outlines priority sector lending targets for domestic and foreign banks in India and monitoring of priority sector lending by the Reserve Bank of India.
The document provides an overview of the 20 lakh crore stimulus package announced by the Indian government as part of its Atmanirbhar Bharat Abhiyaan or Self-Reliant India Mission. It discusses that the package includes previous announcements and RBI measures, so the actual new spending will be lower. It also summarizes the key highlights of the five tranches of stimulus measures focused on MSMEs, farmers, food processing, defense, space, minerals, and more. However, it notes that the reliance on credit measures versus direct fiscal spending may not sufficiently boost aggregate demand due to issues in transmission and lack of backward/forward linkages in the economy.
Relief Measures by RBI and Banks to MSME, Real Estate and NBFC SectorSumedha Fiscal
In order to alleviate the economic pain widely caused by the global pandemic, RBI announces new measures. Here is a breakdown of the steps taken and what the future holds.
The document discusses the history and evolution of priority sector lending targets in India. It outlines that commercial banks were initially advised to raise priority sector lending to 33% by 1979, and then to 40% by 1985. Over time, sub-targets were also specified for agriculture and weaker sections. The document then defines the current categories of priority sector and sets targets for domestic and foreign banks, including total priority sector advances, agricultural advances, SSI advances, micro enterprises, export credit, and advances to weaker sections.
The document provides information about various schemes and initiatives by the Ministry of Micro, Small and Medium Enterprises (MSME) in India to support MSMEs. It discusses schemes that provide loans, credit guarantees, funding support, skill development programs, and a single-window portal called CHAMPIONS to address MSME grievances and needs. The document also provides details on the objectives, eligibility criteria, nature of assistance for schemes like the Emergency Credit Guarantee Scheme, Subordinate Debt for Stressed MSMEs, and the Public Procurement Policy for MSMEs.
The document summarizes various components of India's economic stimulus packages announced to support businesses, farmers, and workers impacted by COVID-19. It discusses collateral-free loans for MSMEs, equity support for stressed MSMEs, increased liquidity support for NBFCs and DISCOMs, expanded public works programs to employ returning migrant workers, and increased agriculture support through loans and infrastructure development funds. The packages total over Rs. 20 lakh crore and aim to provide liquidity, credit, and job support across key economic sectors battered by the pandemic.
The document discusses priority sector lending in India. It defines priority sectors as agriculture, small scale industries, and other identified sectors of economic importance. It provides details on categories of lending covered under priority sectors such as short term crop loans, medium and long term agriculture loans, small scale industry loans, and loans to weaker sections. It also outlines priority sector lending targets for domestic and foreign banks in India and monitoring of priority sector lending by the Reserve Bank of India.
The document provides an overview of the 20 lakh crore stimulus package announced by the Indian government as part of its Atmanirbhar Bharat Abhiyaan or Self-Reliant India Mission. It discusses that the package includes previous announcements and RBI measures, so the actual new spending will be lower. It also summarizes the key highlights of the five tranches of stimulus measures focused on MSMEs, farmers, food processing, defense, space, minerals, and more. However, it notes that the reliance on credit measures versus direct fiscal spending may not sufficiently boost aggregate demand due to issues in transmission and lack of backward/forward linkages in the economy.
Relief Measures by RBI and Banks to MSME, Real Estate and NBFC SectorSumedha Fiscal
In order to alleviate the economic pain widely caused by the global pandemic, RBI announces new measures. Here is a breakdown of the steps taken and what the future holds.
The document discusses the history and evolution of priority sector lending targets in India. It outlines that commercial banks were initially advised to raise priority sector lending to 33% by 1979, and then to 40% by 1985. Over time, sub-targets were also specified for agriculture and weaker sections. The document then defines the current categories of priority sector and sets targets for domestic and foreign banks, including total priority sector advances, agricultural advances, SSI advances, micro enterprises, export credit, and advances to weaker sections.
The document provides information about various schemes and initiatives by the Ministry of Micro, Small and Medium Enterprises (MSME) in India to support MSMEs. It discusses schemes that provide loans, credit guarantees, funding support, skill development programs, and a single-window portal called CHAMPIONS to address MSME grievances and needs. The document also provides details on the objectives, eligibility criteria, nature of assistance for schemes like the Emergency Credit Guarantee Scheme, Subordinate Debt for Stressed MSMEs, and the Public Procurement Policy for MSMEs.
The document outlines priority sector lending targets and guidelines in India from 1968 to 2015. Key points include:
- Targets for priority sector advances have increased over time, currently at 40% of adjusted net bank credit.
- Priority sectors include agriculture (18% target), micro, small and medium enterprises (20% target), weaker sections (10%), and others.
- Agricultural lending includes loans to small/marginal farmers, agriculture infrastructure, and ancillary activities.
- Revised guidelines in 2015 set targets to be achieved in phases for foreign banks with less than 20 branches.
Analysing the impact stimulus package Sanika Yadav
The document summarizes and analyzes India's 20 lakh crore economic stimulus package announced by Prime Minister Modi. It breaks down the spending categories and amounts. It also provides perspectives from economists who say the actual fiscal impact is lower than advertised and more should have been done to boost demand. Corporate experts note that much of the package focuses on credit and liquidity rather than direct fiscal stimulus.
Atmanirbhar presentation - Stimulus by Indian Government - Part 1 business in...Dilip Sankarreddy
Stimulus package announced by Government of India to tackle the economic distress caused by corona virus or covid-19. The stimulus package has been named as 'Atmanirbhar Bharath'.
The total package size is about 10% of India's GDP.
Date of announcement: 13 May 2020.
AatmaNirbhar Bharat Presentation- Government Reforms and EnablersLabour Law Advisor
Aatmanirbhar Bharat Scheme announced by Government of India in the wake of COVID 19. The whole scheme was divided into 5 parts. It is the official PPT of Part 5 Government Reforms and Enablers that includes the direct and indirect schemes launched to help boosting the economy from the slowdown.
Priority Sector Lending in India | भारत में प्राथमिकता क्षेत्र ऋण | Priority ...Abinash Mandilwar
Priority Sector Lending is very important topics for banking knowledge. This video is based on latest RBI guidelines. It is useful for JAIIB/CAIIB Exam, Bank Po Exam and Bank promotion. Don't forget to like share and comment the video. If you want video on any banking topics, suggest me in the comment box. For details you may refer my book on JAIIB. https://www.flipkart.com/search?q=abi...
The Reserve Bank of India had recently directed to Public Sector Banks as well as Private Sector Banks to downgrade the asset classification of more than 150 borrower accounts, based upon Asset Quality review, to Non- Performing Assets (NPAs). The exposure of banking sector to such borrower accounts was in the range of ` 1,50,000 Crores to ` 2,00,000 Crores.
This presentaiton contains about what are the banks products and what are strategies should made by the bank to promote the bank products in rural area...
Ease of doing business challenges persistingNeha Sharma
The new government has been brought to power by electorate of our nation along with large expectations by industry, businesses and professions and other stakeholders of the Indian economy.
The document summarizes priority sector lending in India. It defines priority sectors as areas of the economy that are prioritized for funding by the government and central bank. Banks are directed to provide loans to these sectors at reduced interest rates to promote their development. The priority sectors include agriculture, small businesses, education and housing. The document outlines the sectors and challenges they face, as well as the role of priority sector lending in addressing issues like unemployment and poverty. It discusses targets for priority sector lending and how the Reserve Bank of India monitors compliance.
Decoding of government of india 20 lakhs crore packageRajivRoy28
The follwing article decodes Government of India Announcement regarding COVID 19 Economic Package its vision/purpose, its intended usage, its implication in Indian circuit.
Here is a short overview of 20 lakh crore economic relief package introduced by the government of India under Aatmanirbhar Bharat to revive the economy from the effects of COVID-19.
This document provides an overview of rural banking in India. It discusses the various products offered by rural banks, including agriculture credits, financial inclusion programs, and loans for MSMEs and deposits. It then covers the sources of rural finance such as nationalized banks, cooperative banks, and NABARD. NABARD plays an important role in facilitating credit flow for rural development through refinance functions, direct financing, developmental activities, and supervising rural financial institutions.
Subordinate debt worth Rs. 20,000 crores introduced for stressed MSMEs. Those companies which are stressed or even an NPA are eligible for this facility. 2 lakh MSMEs are likely to benefit from this.
Crop Loans, also called short term loans for seasonal agricultural operations, are intended to cover the costs of raising crops until harvest. The Kisan Credit Card (KCC) scheme provides farmers crop loans through commercial banks, cooperative banks, and regional rural banks. All farmers, including small/marginal farmers and tenant farmers, are eligible for a KCC. KCC holders are also covered by a personal accident insurance scheme. Banks assess eligibility based on land available and credit history, and the scope of KCC has been expanded to include term credit and consumption needs.
The Kisan Credit Card (KCC) scheme was introduced in 1998 by the Government of India to provide timely and adequate credit to small and marginal farmers in a flexible manner. It addresses the credit needs of resource-poor farmers. Commercial banks, cooperative banks, and regional rural banks were entrusted to implement the KCC scheme. The KCC scheme provides credit to farmers for crop production and ancillary activities, with limits set based on landholding size, cropping patterns, and scale of financing. Repayment is required within 12 months, and the card is valid for 3-5 years with the option to increase credit limits.
This document provides information about various credit guarantee schemes operated by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in India. It summarizes recent amendments made to expand coverage to retail traders. It also outlines eligibility criteria, extent of guarantee coverage, applicable fees, and features of schemes for education loans, skill development loans, and micro units. The document concludes by describing the CGTMSE module available in the Finacle banking software.
The document discusses the Kisan Credit Card (KCC) scheme, which provides affordable credit to farmers in India. KCC was introduced in 1998 by the Government of India and is formulated by NABARD. It provides short-term credit for cultivation and other agricultural needs. Eligible farmers between 18-75 years can apply, with joint applications allowed for up to 5 people. Interest rates for KCC loans vary by bank but are typically between 7-13%. Insurance of up to Rs. 50,000 is provided for death and Rs. 25,000 for disability. The goal of KCC is to provide timely and adequate credit to farmers with minimal documentation.
The borrower account would be eligible under the scheme if:
1) The account was classified as SMA-1 as on 29th February 2020 i.e. the number of days past due was between 31-60 days.
2) The account was not classified as NPA or SMA-2 as on 29th February 2020. Since the number of days past due was less than 90 days as on 29th Feb 2020, the account would be classified as SMA-1 and hence eligible.
3) The borrower meets all other eligibility criteria like loan outstanding, turnover limit etc.
So in this case, since the number of days past due was less than 90, the account would be classified as S
The document summarizes the key aspects of the Micro, Small and Medium Enterprises Development Act passed by the Government of India in 2006. Some highlights include expanded definitions and limits for micro, small and medium enterprises based on plant and machinery investment, classification of micro and small enterprises under priority sector lending, guidelines around loan applications, security aspects, and methodologies for calculating working capital and term loan financing.
RESTRUCTURING OF MSMEs & CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD)Ajayan Kavungal Anat
This is a brief presentation to give insights into the
new guidelines issued by Reserve Bank of India for
‘Restructuring of MSMEs’ and also on Subordinate
Debt for Stressed MSMEs’
Atmanirbhar presentation part 1 business including msm es 13-5-2020gulan kriplani
The document outlines economic reforms and initiatives in India to promote self-reliance, including support for businesses and MSMEs. Key points include:
1) A Rs. 20 lakh crore economic stimulus package, including collateral-free loans for businesses up to 20% of outstanding credit.
2) Rs. 20,000 crore in subordinate debt and a Rs. 50,000 crore fund to provide equity to stressed MSMEs.
3) Revising the definition of MSMEs to increase investment and turnover thresholds.
The document outlines priority sector lending targets and guidelines in India from 1968 to 2015. Key points include:
- Targets for priority sector advances have increased over time, currently at 40% of adjusted net bank credit.
- Priority sectors include agriculture (18% target), micro, small and medium enterprises (20% target), weaker sections (10%), and others.
- Agricultural lending includes loans to small/marginal farmers, agriculture infrastructure, and ancillary activities.
- Revised guidelines in 2015 set targets to be achieved in phases for foreign banks with less than 20 branches.
Analysing the impact stimulus package Sanika Yadav
The document summarizes and analyzes India's 20 lakh crore economic stimulus package announced by Prime Minister Modi. It breaks down the spending categories and amounts. It also provides perspectives from economists who say the actual fiscal impact is lower than advertised and more should have been done to boost demand. Corporate experts note that much of the package focuses on credit and liquidity rather than direct fiscal stimulus.
Atmanirbhar presentation - Stimulus by Indian Government - Part 1 business in...Dilip Sankarreddy
Stimulus package announced by Government of India to tackle the economic distress caused by corona virus or covid-19. The stimulus package has been named as 'Atmanirbhar Bharath'.
The total package size is about 10% of India's GDP.
Date of announcement: 13 May 2020.
AatmaNirbhar Bharat Presentation- Government Reforms and EnablersLabour Law Advisor
Aatmanirbhar Bharat Scheme announced by Government of India in the wake of COVID 19. The whole scheme was divided into 5 parts. It is the official PPT of Part 5 Government Reforms and Enablers that includes the direct and indirect schemes launched to help boosting the economy from the slowdown.
Priority Sector Lending in India | भारत में प्राथमिकता क्षेत्र ऋण | Priority ...Abinash Mandilwar
Priority Sector Lending is very important topics for banking knowledge. This video is based on latest RBI guidelines. It is useful for JAIIB/CAIIB Exam, Bank Po Exam and Bank promotion. Don't forget to like share and comment the video. If you want video on any banking topics, suggest me in the comment box. For details you may refer my book on JAIIB. https://www.flipkart.com/search?q=abi...
The Reserve Bank of India had recently directed to Public Sector Banks as well as Private Sector Banks to downgrade the asset classification of more than 150 borrower accounts, based upon Asset Quality review, to Non- Performing Assets (NPAs). The exposure of banking sector to such borrower accounts was in the range of ` 1,50,000 Crores to ` 2,00,000 Crores.
This presentaiton contains about what are the banks products and what are strategies should made by the bank to promote the bank products in rural area...
Ease of doing business challenges persistingNeha Sharma
The new government has been brought to power by electorate of our nation along with large expectations by industry, businesses and professions and other stakeholders of the Indian economy.
The document summarizes priority sector lending in India. It defines priority sectors as areas of the economy that are prioritized for funding by the government and central bank. Banks are directed to provide loans to these sectors at reduced interest rates to promote their development. The priority sectors include agriculture, small businesses, education and housing. The document outlines the sectors and challenges they face, as well as the role of priority sector lending in addressing issues like unemployment and poverty. It discusses targets for priority sector lending and how the Reserve Bank of India monitors compliance.
Decoding of government of india 20 lakhs crore packageRajivRoy28
The follwing article decodes Government of India Announcement regarding COVID 19 Economic Package its vision/purpose, its intended usage, its implication in Indian circuit.
Here is a short overview of 20 lakh crore economic relief package introduced by the government of India under Aatmanirbhar Bharat to revive the economy from the effects of COVID-19.
This document provides an overview of rural banking in India. It discusses the various products offered by rural banks, including agriculture credits, financial inclusion programs, and loans for MSMEs and deposits. It then covers the sources of rural finance such as nationalized banks, cooperative banks, and NABARD. NABARD plays an important role in facilitating credit flow for rural development through refinance functions, direct financing, developmental activities, and supervising rural financial institutions.
Subordinate debt worth Rs. 20,000 crores introduced for stressed MSMEs. Those companies which are stressed or even an NPA are eligible for this facility. 2 lakh MSMEs are likely to benefit from this.
Crop Loans, also called short term loans for seasonal agricultural operations, are intended to cover the costs of raising crops until harvest. The Kisan Credit Card (KCC) scheme provides farmers crop loans through commercial banks, cooperative banks, and regional rural banks. All farmers, including small/marginal farmers and tenant farmers, are eligible for a KCC. KCC holders are also covered by a personal accident insurance scheme. Banks assess eligibility based on land available and credit history, and the scope of KCC has been expanded to include term credit and consumption needs.
The Kisan Credit Card (KCC) scheme was introduced in 1998 by the Government of India to provide timely and adequate credit to small and marginal farmers in a flexible manner. It addresses the credit needs of resource-poor farmers. Commercial banks, cooperative banks, and regional rural banks were entrusted to implement the KCC scheme. The KCC scheme provides credit to farmers for crop production and ancillary activities, with limits set based on landholding size, cropping patterns, and scale of financing. Repayment is required within 12 months, and the card is valid for 3-5 years with the option to increase credit limits.
This document provides information about various credit guarantee schemes operated by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in India. It summarizes recent amendments made to expand coverage to retail traders. It also outlines eligibility criteria, extent of guarantee coverage, applicable fees, and features of schemes for education loans, skill development loans, and micro units. The document concludes by describing the CGTMSE module available in the Finacle banking software.
The document discusses the Kisan Credit Card (KCC) scheme, which provides affordable credit to farmers in India. KCC was introduced in 1998 by the Government of India and is formulated by NABARD. It provides short-term credit for cultivation and other agricultural needs. Eligible farmers between 18-75 years can apply, with joint applications allowed for up to 5 people. Interest rates for KCC loans vary by bank but are typically between 7-13%. Insurance of up to Rs. 50,000 is provided for death and Rs. 25,000 for disability. The goal of KCC is to provide timely and adequate credit to farmers with minimal documentation.
The borrower account would be eligible under the scheme if:
1) The account was classified as SMA-1 as on 29th February 2020 i.e. the number of days past due was between 31-60 days.
2) The account was not classified as NPA or SMA-2 as on 29th February 2020. Since the number of days past due was less than 90 days as on 29th Feb 2020, the account would be classified as SMA-1 and hence eligible.
3) The borrower meets all other eligibility criteria like loan outstanding, turnover limit etc.
So in this case, since the number of days past due was less than 90, the account would be classified as S
The document summarizes the key aspects of the Micro, Small and Medium Enterprises Development Act passed by the Government of India in 2006. Some highlights include expanded definitions and limits for micro, small and medium enterprises based on plant and machinery investment, classification of micro and small enterprises under priority sector lending, guidelines around loan applications, security aspects, and methodologies for calculating working capital and term loan financing.
RESTRUCTURING OF MSMEs & CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD)Ajayan Kavungal Anat
This is a brief presentation to give insights into the
new guidelines issued by Reserve Bank of India for
‘Restructuring of MSMEs’ and also on Subordinate
Debt for Stressed MSMEs’
Atmanirbhar presentation part 1 business including msm es 13-5-2020gulan kriplani
The document outlines economic reforms and initiatives in India to promote self-reliance, including support for businesses and MSMEs. Key points include:
1) A Rs. 20 lakh crore economic stimulus package, including collateral-free loans for businesses up to 20% of outstanding credit.
2) Rs. 20,000 crore in subordinate debt and a Rs. 50,000 crore fund to provide equity to stressed MSMEs.
3) Revising the definition of MSMEs to increase investment and turnover thresholds.
Aatmanirbhar Bharat Scheme announced by Government of India in the wake of COVID 19. The whole scheme was divided into 5 parts. It is the official PPT of Part 1 entailing the inclusion of MSMEs in the development of economy.
This document provides information on various loan schemes and targets for MSME lending in India. It discusses loan eligibility limits and categories for micro, small, and medium enterprises. It also summarizes guidelines for the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, including eligible sectors, guarantee coverage amounts and periods, claim settlement processes, and other operational details.
This document summarizes various relief measures and schemes introduced by the Indian government for MSMEs during the COVID-19 pandemic. Key measures include upward revision of MSME definitions, collateral-free automatic loans worth Rs. 3 lakh crores for businesses including MSMEs, subordinate debt of Rs. 20,000 crores for stressed MSMEs, equity infusion of Rs. 50,000 crores through a fund of funds, and extension of EPF support. It also provides overviews of various existing schemes to support MSMEs including the Credit Guarantee Trust Fund, ZED certification, credit-linked capital subsidy, bar code registration reimbursement, and schemes specific to the apparel industry.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
This document discusses financing for micro, small, and medium enterprises (MSMEs) in India. It defines MSMEs based on investment levels and classifies them under priority sectors. It outlines various manufacturing and service activities eligible for MSME financing. It also describes the types of credit facilities available to MSMEs, including term loans, cash credits, and letters of credit. Processing procedures for loan applications are explained, along with guidelines on maintaining application registers and rejecting proposals.
The document discusses various agricultural credit schemes and issues in India. It notes that the volume of agricultural credit is insufficient given rising input costs, and farmers often rely on informal credit at high interest rates due to inadequate banking infrastructure and outreach. It then describes various types of agricultural credit (short, medium, and long term), and key schemes like Kisan Credit Cards which provide loans for inputs, production needs, and investment. Requirements, application processes, and other details are provided for KCC and other financing programs aimed at improving access to affordable credit for farmers.
Micro, Small and Medium Enterprises (MSMEs) play a major role in economic development, particularly in emerging countries.
MSMEs :
Contributes to the economic growth,
Enormous potential for growth
Potential for employment and income generation
for vast masses of the country.
Government pronouncements about “Make in India” are fundamentally based on these convictions.
There is heightened attention by the international community on MSME sector.
This is primarily because of the critical importance of job creation in the recovery cycle following the recent financial crisis, and the MSME’s potentials in that respect.
In Indian economy, MSME sector contribute :
45 % of the manufacturing output.
40 % of the exports.
There are 467.56 lakh enterprises in the MSME sector.
Provide the largest share of the employment after agriculture. Employment opportunities to 10.62 crore people across the country.
This document summarizes economic relief measures announced by the Indian government. It provides collateral-free loans worth Rs. 3 lakh crores to MSMEs, subordinate debt of Rs. 20,000 crores for stressed MSMEs, and a Rs. 50,000 crore fund of funds to infuse equity into viable MSMEs. It also reduces EPF contributions for businesses and workers for 3 months, provides liquidity support of Rs. 30,000 crores to NBFCs/HFCs/MFIs, and extends compliance timelines and releases bank guarantees for government contractors. It further extends registration and completion dates for real estate projects, reduces TDS and TCS rates by 25% until March
Rbi master circular lending to micro, small & medium enterprises (msme) secto...Kale Law Office
The document summarizes guidelines from the Reserve Bank of India on lending to micro, small, and medium enterprises (MSMEs) in India. Key points include:
1) The MSMED Act of 2006 modified definitions of micro, small, and medium enterprises and included services.
2) Guidelines stipulate timelines for disposing loan applications, mandatory acknowledgements, collateral-free loans up to Rs. 10 lakh, composite loans up to Rs. 1 crore, and penalties for delayed payments to MSMEs.
3) Banks must rehabilitate potentially viable sick MSME units within 6 months and implement debt restructuring mechanisms for eligible MSMEs.
This document discusses financial inclusion of street vendors through microenterprise promotion and microloans. It outlines challenges vendors face in accessing credit due to lack of documentation and collateral. Solutions proposed include financial literacy programs, vendor licensing, and innovative digital lending processes. The State Bank of India has several initiatives to promote lending under India's Pradhan Mantri Mudra Yojana program, including collateral-free loans up to Rs. 10 lacs and credit guarantee coverage. SBI has disbursed over Rs. 5.28 lakh crore to more than 11.96 crore beneficiaries through this program over the past 3 years.
Whereas, Commercial Bank of Ethiopia (CBE) has changed its strategic direction to customer centricity with the aim of making savings and credit products more customer centric and offering better customer value propositions;
Whereas, it has become necessary to improve customer experience by digitizing micro business segment through Micro loan products;
Whereas, Commercial bank of Ethiopia intends to diversify its credit portfolio mix in terms of tenure through expanding the short-term financing to be availed to micro business segments;
Whereas, it is necessary to set eligibility requirements, terms and conditions of loan products and services to the micro business segment in view of risk involved and customer’s demand;
Whereas, it is necessary to attract the underserved part of the society and enhance financial inclusion with low-cost financial services availed through mobile money platform;
Whereas, the majority of Micro Enterprises do not fit the loan terms and conditions of Micro Finance Institutions and Banks due to they are high in number and lacked collateral. And CBE has established Micro Credit Department to properly address loan demand from Micro Enterprises.
NOW, therefore; it becomes important to develop and introduce the “Micro Saving and Loan Policy”.
1.2. Short Title
This policy may be cited as “Micro Saving and Loan (MSL) Policy of the Commercial Bank of Ethiopia”;
1.3. Definitions of Terms
“Board” means supervisory Board of the Bank formed in accordance with Article 10 (2) and 12 of Public Enterprises Proclamation No 25/1992.
“Credit Scoring” means judging/evaluating the creditworthiness of a customer based on basic characteristics and past experiences with credit.
“Digital Lending” means a remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer services.
“Micro Saving and Loan (MSL)” means a digital based saving and lending platform for customers. Here, Under MSL, the “Micro Saving” is a saving platform that allows customers to save money on a digital platform (using their mobile phones) without visiting branches and filling forms. “Micro Loan” is uncollateralized(Credit Scoring Based) digital lending product which is instant, automated, and remote loan offered through mobile phones for CBE Birr customers;
“Micro saving and Loan” means a small amount of loan availed to micro businesses and individuals for the purpose of supporting businesses and consumption.
“MSL Policy” means a general framework approved by the board that spells out and guides the bank’s MSL strategic directions, processes or activities and credit /financing decision.
“National Bank of Ethiopia (NBE)” means a supervising authority of banks, established in accordance with the council of ministers’ proclamation number 591/2008;
“Loan Pricing” means setting interest rate, fees, commission and others to be charged by the Bank
This document discusses financial inclusion of street vendors through microenterprise promotion and microloans. It notes that street vendors rely on personal savings and high-interest loans due to a lack of collateral needed for institutional loans. Challenges to their financial inclusion include lack of documentation, financial literacy, and regular income. Prospective solutions proposed include developing savings habits, financial literacy training, and providing legal status and licensing. The document outlines various microloan programs from the government and SBI, including Mudra loans of up to Rs. 10 lacs available from SBI that are collateral-free for business purposes. SBI has disbursed over Rs. 5.28 lakh crore to 11.96 crore beneficiaries through
The document summarizes key developments from the previous week reported on Taxmann.com, including:
1) PM Modi announced a Rs. 20 lakh crore special economic package to make India self-reliant in response to COVID-19. Key aspects include support for MSMEs, definition changes, global tender reforms, and job creation.
2) Finance Minister Sitharaman provided details on the package, such as collateral-free loans for MSMEs, debt support for stressed MSMEs, tax changes, and support for real estate, power utilities and more.
3) Taxation measures include reduced TDS/TCS rates, extended return filing deadlines, and extensions for the
The document discusses various loan schemes offered by KSFC (Karnataka State Financial Corporation) to support MSMEs in Karnataka. Some key details include:
- KSFC has been assisting MSMEs in Karnataka for over 52 years, helping over 1,63,643 units with nearly Rs. 10,465 crore in funding.
- They offer term loans, infrastructure development support, and financial services to MSMEs across various sectors like manufacturing, services, tourism, infrastructure development etc.
- Loan schemes have different eligibility criteria depending on sector, loan amount, security/collateral requirements, repayment periods etc. Interest rates typically range from 10.5% to 12%.
- KSFC
Long Term Visa (LTV) is granted to the following categories of persons of Bangladesh, Afghanistan and Pakistan coming to India on valid travel documents i.e. valid passport and valid visa, and seeking permanent settlement in India with a view to acquire Indian citizenship:-
i. Members of minority communities in Bangladesh/ Afghanistan/ Pakistan, namely Hindus, Sikhs, Buddhists, Jains, Parsis and Christians.
ii. Bangladesh/ Pakistan women married to Indian nationals and staying in India; or Afghanistan nationals married to Indian nationals in India and staying in India.
iii. Indian origin women holding Bangladesh/ Afghanistan/ Pakistan nationality married to Bangladesh/ Afghanistan/ Pakistan nationals and returning to India due to widowhood/ divorce and having no male members to support them in Bangladesh/ Afghanistan/ Pakistan.
iv. Cases involving extreme compassion.
Non-resident Indians are a section of people whose roots belong to India and who have migrated from India. The Indian Government is aware of the importance of Indian Diaspora in the form of NRIs/PIOs which is spread all across the world and which despite being away from India is making significant contribution to the Indian economy on a global platform and to the economic, financial and social benefits which have been brought to India; therefore, it attempts to provide benefits to them to attract their investments. They are also called for taking part in the economy. The Indian government gives lot of benefits to NRI not only with respect to ease of making investment in India but also in Taxation. The investment from NRIs is easy money available and provides the much needed leverage to the economy. The Indian Diaspora today constitutes an important, and inimitable, part of the Indian economy. The PPT discusses about he various account that can be opened by NRIs in India
Certificate course on FEMA_Presentation by Sudha G. Bhushan _ 14th May 2023.pdfTAXPERT PROFESSIONALS
The document provides an overview of a comprehensive course on foreign exchange management under the Foreign Exchange Management Act, 1999 (FEMA). It includes details of the faculty conducting the course, CA Sudha G Bhushan, as well as an outline of topics to be covered related to FEMA regulations for non-resident Indians, resident Indians, contraventions under FEMA, and residential status determination. Examples are also provided to illustrate residential status analysis for individuals and companies under various scenarios. The goal of the course is to explore opportunities and provide advisory services related to FEMA compliance.
In a move to further rationalize and liberalise the overseas investment central Government and Reserve Bank of India notified Foreign Exchange Management (Overseas Investment) Rules, 2022 and Foreign Exchange Management (Overseas Investment) Regulations, 2022 respectively on 22 Aug 2022.
The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics. Immense clarity on Overseas Direct Investment and Overseas Portfolio Investment has been brought in and various overseas investment related transactions that were earlier under approval route are now under automatic route, significantly enhancing "Ease of Doing Business".
This document provides an overview of the legal, compliance and tax benefits available to startups in India under the Startup India scheme. Some key points include:
- Startups registered with DPIIT are eligible for self-certification of compliance under 6 labour laws and 3 environmental laws for 5 years.
- Income tax exemptions are available to DPIIT-registered startups under Section 80-IAC for any 3 years in the first 10 years of operations.
- Angel tax exemption under Section 56(2)(viib) is available for DPIIT-registered startups receiving share premium if total share capital and premium does not exceed Rs. 25 crore.
The document discusses how India's technology entrepreneurship will help create a $10 trillion economy by 2030. It outlines that India has a large population that is still young, a strong industrial and agricultural base, and adequate savings for investment and growth. The startup ecosystem in India is growing rapidly and will be a major driver of economic growth, creating millions of jobs and billions in valuation. Key government digital identity and financial inclusion initiatives like Aadhaar, UPI, and JAM provide foundational digital infrastructure to support this growth.
This document discusses the importance of working capital management for companies. It defines working capital as the difference between current assets and current liabilities. Effective working capital management is important to ensure liquidity while not overinvesting in current assets. The document analyzes working capital trends, efficiency using various ratios, and a company's liquidity position to evaluate working capital needs.
This short document appears to be about a ladies' wing and mentions it three times along with a tax corner, suggesting it is providing some basic information about sections within a building or organization dedicated to women and taxes.
As per section 92 of the Income Tax Act,1961 “Any
income arising from an international transaction shall
be computed having regard to the arm's length
price” Where in an international transaction two or
more associated enterprises enter into a mutual
agreement or arrangement for the allocation or
apportionment of, or any contribution to, any cost or
expense incurred or to be incurred in connection with
a benefit, service or facility provided or to be
provided to any one or more of such enterprises, the
cost or expense allocated or apportioned to, or, as
the case may be, contributed by, any such enterprise
shall be determined having regard to the arm's
length price of such benefit, service or facility, as the
case may be.
The 2008 Financial Crisis changed the world of Banking. Many malpractices by the Banks and various financial institutions came into light and the regulators started scrutinizing and penalizing them. The world’s most important number “LIBOR” came under the sword of the Regulators. In this article we will explore the origins and the fall of the once revered LIBOR rate.
Valuation under FEMA focuses on two main rules:
1. All current account transactions are allowed unless prohibited.
2. All capital account transactions are prohibited unless allowed.
FEMA established guidelines for valuation of shares and securities for foreign direct investment. For listed companies, the price cannot be less than that determined by SEBI guidelines. For unlisted companies, valuation must use an internationally accepted methodology certified by authorized persons. Convertible instruments must specify the conversion price upfront, which cannot be lower than the fair value at issuance.
THERE ARE QUITE A FEW REGULATORY SPACES
WHICH NEEDS TO BE KEPT IN CONSIDERATION
WHILE MAKING THE REPORT. IN THIS ARTICLE WE
SHALL DISCUSS REGARDING DRAFTING AND THE
CONTENT OF VALUATION REPORT ONE BY ONE IN
DETAIL.
One of the important aspect of Start up is raising of funds. Fundraising is a necessary, and most important task in the life of Start ups. IN THIS ARTICLE GIVES PRELIMINARY INSIGHTS INTO FUND RAISING BY STARTUPS
No, this transaction cannot be undertaken based on Section 3(b) of FEMA.
Section 3(b) prohibits making any payment to or for the credit of any person resident outside India in any manner. In this case, Shyam, who is resident in India, is making the payment for the credit of Pradeep, who is resident outside India (an NRI).
However, Regulation 6(2) of the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 allows a resident in India to make certain specified payments in rupees to NRIs, such as for boarding/lodging during visit to India. But the given transaction, where an immovable property is being purchased, does not
The document discusses the due diligence requirements for cross border transactions and mergers. It covers:
- The key definitions under regulations for cross border mergers between an Indian company and foreign company.
- The allowability, vulnerability, accountability, and explainability aspects that must be considered for cross border transactions.
- The conditions under which an Indian company can merge with a foreign company or vice versa, including compliance with FEMA regulations, treatment of offices and assets/liabilities, valuation requirements, and other regulatory conditions.
- Specific provisions for inbound and outbound mergers depending on whether the resultant company is Indian or foreign. This includes timelines for compliance on guarantees, borrowings, and non-compliant assets.
The document discusses cross-border valuations and considerations under Indian regulatory framework. It outlines factors like cost of capital, treatment of currency and country risk, taxation rates, and treatment of earned versus remitted income in cross-border valuations. Methods for cross-border valuations including discounting cash flows in foreign currency or converting to home currency are described. Regulatory guidelines for pricing of instruments like shares, CCDs, and deferred payments are provided. Special situations like cross-border mergers are also covered. Overall, the document provides an overview of key aspects to consider for cross-border valuations under the Indian regulatory framework.
The document discusses various ways for foreign entities to invest and establish a presence in India, including incorporated and unincorporated entities. It provides details on types of unincorporated entities like liaison offices, branch offices, and project offices, as well as the regulatory requirements for establishing and operating each type. It also covers incorporated joint ventures and wholly owned subsidiaries and compares the characteristics of unincorporated vs incorporated structures.
The document discusses various ways for foreign investment in India including incorporated and unincorporated entities. It provides details on types of unincorporated entities like liaison offices, branch offices and project offices that can be established by foreign companies in India. It also summarizes the key differences between these types of unincorporated entities and incorporated joint ventures or wholly owned subsidiaries when it comes to permissions required, activities allowed, profit repatriation and other aspects. Further, it outlines the regulatory framework governing foreign investment in India including relevant regulations, rules and policies.
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordinary And Special Businesses And Ordinary And Special Resolutions with Companies (Postal Ballot) Regulations, 2018
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
Matthew Professional CV experienced Government LiaisonMattGardner52
As an experienced Government Liaison, I have demonstrated expertise in Corporate Governance. My skill set includes senior-level management in Contract Management, Legal Support, and Diplomatic Relations. I have also gained proficiency as a Corporate Liaison, utilizing my strong background in accounting, finance, and legal, with a Bachelor's degree (B.A.) from California State University. My Administrative Skills further strengthen my ability to contribute to the growth and success of any organization.
What are the common challenges faced by women lawyers working in the legal pr...lawyersonia
The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Receivership and liquidation Accounts
Being a Paper Presented at Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) on Friday, August 18, 2023.
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersHarpreetSaini48
Discover how Mississauga criminal defence lawyers defend clients facing weapon offence charges with expert legal guidance and courtroom representation.
To know more visit: https://www.saini-law.com/
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
This document briefly explains the June compliance calendar 2024 with income tax returns, PF, ESI, and important due dates, forms to be filled out, periods, and who should file them?.
2. • MSME
• What is an MSME
• How the definition of MSME has changed? Are
you an MSME?
• If you are an MSME – Are you registered as
MSME to avail various benefits.
• Benefits available
• Priority sector Lending
• Protection from delayed payment
• others
• Funding
• Under Covid 19
• Government stimulus package
• Subordinated debt
• Otherwise
• Treds
TopicsofDiscussion
2
3. WhatisMSME….?
MSME stands for Micro, Small, and Medium Enterprises.
3
Classification Micro Small Medium
Mfg. Enterprises Investment < Rs 25 lac Investment < Rs 5 Cr. Investment < Rs 10 Cr.
Service Enterprises Investment < Rs 10 lac Investment < Rs 2 Cr. Investment < Rs 5 Cr.
Classification Micro Small Medium
Existing and Revised Definition of MSMEs
Existing MSME Classification
Criteria : Investment in Plant and Machinrey or Equipment
Manufacturing &
Services
Investment < Rs 1 Cr. &
Turnover < Rs 5 Cr.
Investment < Rs 10 Cr. &
Turnover < Rs 50 Cr
Investment < Rs 20 Cr. &
Turnover < Rs 100 Cr.
Revised MSME Classification
Composite Criteria : Investment and Annual Turnover
8. Part1
• Pradhan Mantri Garib Kalyan Package
• Automatic collateral free loans: INR 3 trillion (~ US$ 40 billion)
• Subordinated debt for MSMEs: INR 200 billion (~ US$ 2.67 billion)
• Fund of funds for MSMEs: INR 500 billion (~ US$ 6.67 billion)
• Global tenders to be disallowed upto Rs 200 crores
• Rs. 2500 crore EPF Support for Business & Workers for 3 more months
• EPF contribution reduced for Business & Workers for 3 months- Rs 6750 crores Liquidity Support
• Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs
• Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs
• Rs. 90,000 Cr. Liquidity Injection for DISCOMs
• Extension of Registration and Completion Date of Real Estate Projects under RERA
• Rs 50,000 crores liquidity through TDS/TCS rate reduction
8
9. Part2
• Direct Support to Farmers & Rural Economy provided post COVID
• Liquidity Support to Farmers & Rural Economy provided post COVID
• Support for Migrants and Urban Poor during last 2 months
• MGNREGS support to returning Migrants
• Labour Codes - Benefits for Workers
• Free Food grain Supply to Migrants for 2 months
• Technology Systems to be used enabling Migrants to access Public Distribution System (Ration) from any Fair
Price Shop in India by March 2021 - One Nation One Ration Card
• Affordable Rental Housing Complexes (ARHC) for Migrant Workers / Urban Poor
• Rs. 1500 crores Interest Subvention for MUDRA-Shishu Loans
• Rs 5000 cr Special Credit Facility for Street Vendors
• Rs 70,000 crore boost to housing sector and middle income group through extension of CLSS
• Rs 6000 crore employment push using CAMPA funds
• Rs 30,000 crores Additional Emergency Working Capital Funding for farmers through NABARD
• Rs 2 lakh crore Concessional credit boost to 2.5 crore farmers through Kisan Credit Cards
9
10. Part3
• Amendments proposed in the Essential Commodities Act, 1955 (ECA)
Better price realisation by attracting investments and making agriculture sector competitive.
Deregulation of agricultural foodstuff, including cereals, edible oils, oilseeds, pulses, onions and potato. Stock limit
will be imposed only under very exceptional circumstances such as national calamities, famine, with surge in prices
of agricultural produce. For food processing and exporters, limits will be linked to capacity and export demand.
• Legal framework for agriculture produce price and Quality Assurance to be implemented
Risk mitigation for farmers, assured returns, quality standardization.
Facilitative legal framework will be created that will enable farmers to engage directly with processors,
aggregators, large retailers, exporters, etc. in a fair and transparent manner.
10
11. Part4
• Policy reforms to fast-track investment and upgradation of industrial infrastructure
• Coal sector reforms – End of Government Monopoly
• Mining sector reforms
• Defence production
• Aviation sector
• Power Sector
• Atomic energy related reforms
• Social infrastructure
• Space - Private sector to be a co-traveller
11
12. Part5
• Additional allocation of funds for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
or reforms
• Health reforms and initiatives
• Policy reforms to facilitate technology driven education with equity and technology systems
• Relaxation in IBC matters
• Decriminalisation of offences under the Companies Act, 2013 (2013 Act)
• Improving fund raising opportunities for Indian companies
• Ironing out certain procedural aspects of Indian corporate laws
• Public Sector Enterprise (PSE) policy
• Proposal to link enhanced borrowing by states to specific reforms
12
15. • Emergency Credit Line Guarantee
Scheme
• Subordinate Debt for Stressed MSMEs
• Equity infusion for MSMEs through
Fund of Funds
• Others
15
Liquidity Infusion directly to MSMEs
18. • To provide 100% guarantee coverage for the GECL,
which shall be a pre-approved sanction limit of up
to 20% of loan outstanding as on 29th February,
2020 to eligible borrowers,
• in the form of additional working capital term loan
facility (in case of banks and Financial Institutions),
and additional term loan facility (in case of NBFCs)
from all Member Lending Institutions (MLIs)
• to eligible Business Enterprises / Micro, Small and
Medium Enterprise (MSME) borrowers,
• including interested PMMY borrowers , in view of
COVID-19 crisis, as a special Scheme.
18
Purpose of scheme
19. PURPOSE OFTHE SCHEME
Provide 100% guarantee coverage for the
GECL
Be a pre-approved sanction limit of up to 20% of loan
outstanding as on 29th February, 2020
To eligible borrowers
In the form of additional working
capital term loan facility (in case of
banks and Financial Institutions)
In the form Additional
term loan facility (in case
of NBFCs)
FROM
all Member Lending
Institutions (MLIs)
TO
Eligible Business
Enterprises / Micro, Small
and Medium Enterprise
(MSME) borrowers,
including interested
PMMY borrowers
1919
20. • All MSME borrower accounts with combined
outstanding loans across all MLIs of up to Rs. 25 crore as
on 29.2.2020, and annual turnover of up to Rs. 100 crore
in FY 2019-20.
• The Scheme is valid only for existing customers on the
books of the MLI.
• Borrower accounts should be classified as regular,
SMA-0 or SMA-1 as on 29.2.2020. Accounts classified as
NPA or SMA-2 as on 29.2.2020 will not be eligible under
the Scheme.
• The MSME borrower must be GST registered in all
cases where such registration is mandatory. This
condition will not apply to MSMEs that are not required
to obtain GST registration.
• Loans provided in individual capacity will not be
covered under the Scheme.
20
Eligibility Criteria
21. 2121
Eligibility Criteria
Nature of the
activity/facility
Scale of
business
Existing
customer of
the MLI and
Performance
of the loan
Size of the
existing facility
Turnover for
FY 2019-20
GST
registration
22. 22
Scheme is meant only for business loans. Hence, the nature of activity
carried by the entity must be a business, and the facility must be for the
purpose of the business.
A LAP loan was granted to a business entity. The loan was granted against a self-owned house, but the purpose of the
loan was working capital for the retail trade business carried by the borrower. Will this facility be eligible for GECL?
Nature of Activity
23. 23
means all Business Enterprises / MSME institution borrower accounts with
outstanding loans of up to Rs. 25 crore as on 29.2.2020,
and annual turnover of up to Rs. 100 crore in FY 2019-20.
In case accounts for FY 2019-20 are yet to be audited/finalized, the MLI may rely
upon the borrower’s declaration of turnover.
The Scheme is valid for existing customers on the books of the MLI.
Borrower accounts should be less than 60 days past due as on 29th February,
2020 in order to be eligible under the Scheme.
“Eligible borrower”
24. Eligible Borrowers
All Business Enterprises
/MSME borrower accounts
combined outstanding loans
across all MLIs of up to Rs. 25
crore as on 29.2.2020
Annual turnover of up to Rs.
100 crore for FY 2019-20
AND
Loans provided to Business
Enterprises / MSMEs constituted as
Proprietorship, Partnership,
registered company, trusts and
Limited Liability Partnerships (LLPs)
Business Enterprises / MSMEs
would include loans covered
under Pradhan Mantri Mudra
Yojana extended on or before
29.2.2020, and reported on the
MUDRA portal.
2424
25. Eligible Borrowers
Loans having
co-applicant,
only those
existing loans
where entity is
the primary co-
applicant
Days Past Due
status as on
29.2.2020 to be
checked across
MLIs from
credit bureau.
Valid for existing
customers on the
books of the MLIs.
Borrower accounts
should be less than
or equal to 60 days
past due as on 29th
February, 2020
It is not necessary
that the existing
loans of the
borrowers should
be covered under
the existing
NCGTC or
CGTMSE Scheme.
Business Enterprises /
MSME borrower must
be GST registered in all
cases where such
registration is
mandatory. This
condition will not
apply to Business
Enterprises / MSMEs
that are not required
to obtain GST
registration.
2525
26. NOT ELIGIBLE
Loans provided in individual capacity Business Enterprises / MSME borrower accounts
which had NPA or SMA-2 status as on 29.2.2020
An ‘opt-out’ option should be provided to the eligible Business Enterprises / MSME borrowers to
enable them to choose whether they wish to opt out of the GECL facility.
2626
27. 27
My EMIs are due on 10th of each month. On 10th Feb., 2020, the borrower had two missing EMIs, viz., the one due on 10th
Jan. 2020 and the one due on 10th Feb., 2020. Is the Borrower an Eligible Borrower on 29th Feb., 2020?
The manner of counting DPD is – we need to see the oldest of the instalments/principal/interest due on the reckoning date.
Here, the reckoning date is 29th Feb. On that date, the oldest overdue instalment is that of 10th Jan. This is less than 59
DPD. Hence, the borrower is eligible.
My EMIs are due on the 1st of each month. The borrower has not paid the EMIs due on 1st Jan. and 1st Feb., 2020. Is the
Borrower an Eligible Borrower on 29th Feb., 2020?
On the reckoning date, the oldest instalment is that of 1st Jan. 2020. Since the reckoning date is 29th Feb., we will be
counting only one two dates – 1st Jan and 29th Feb. The time lag between the two adds to exactly 59 days. The borrower
becomes ineligible if the DPD status is more than 59 days. Hence, the borrower is eligible.
Performance of the loan
28. “Member Lending Institution(s)” (MLI)
NBFC: "Non-Banking Financial Company” means a non-banking
financial company as defined in clause (f) of section 45-I of the
RBI Act, 1934 and which has its principal business as defined by
RBI and has been granted a certificate of registration under sub-
section (1) of section 3 of the Act.
All NBFCs which have been in operation for 2 years as on 29th
February, 2020 would be eligible under the Scheme.
Financial Institutions: As
defined in sub-clause (i) of
clause (c) of Section 45-I of
Reserve Bank of India Act.
Banks: All
Scheduled
Commercial Banks.
2828
29. 29
• DURATION• DATE OF COMMENCEMENT
Shall come into force from the date
of issue of these guidelines by
NCGTC.
The period from the date of issue of
these guidelines by NCGTC to
31.10.2020, or till an amount of Rs
3,00,000 crore is sanctioned under
the GECL, whichever is earlier.
31. NatureofaccountandTenorofCreditundertheScheme
A separate loan account should be opened for the borrower, distinct from the existing loan account(s).
The tenor of loans provided under GECL shall be for a tenor of four years from the date of disbursement. No pre-
payment penalty shall, however, be charged by the MLIs in case of early repayment.
Moratorium period of one year on the principal amount shall be provided, during which interest shall be payable.
The principal shall be repaid in 36 installments after the moratorium period is over.
Pre-payment of facilities to be allowed at no additional charge to the borrower.
The account may be operated in combination with applicable Interest Subvention Scheme(s) as far as feasible
RBI’s approval has been solicited for keeping risk weight for loans provided under GECL at zero.
3131
33. outstanding loans across all MLIs of up to Rs. 25 crore
as on 29.2.2020
Whether the threshold limitof outstandingcreditof Rs. 25crores,will have tobe
seen across all the lenders, the borrower is currently dealing with, or with one
singlelender?
The Scheme specifically mentions that the limit of Rs. 25 crores shall be ascertained
consideringtheborroweraccountsofthebusinessenterprises/MSMEswithcombined
outstanding loans across all MLIs. For the purpose of determining whether the
combined exposure of all MLIs is Rs 25 crores or not, the willing MLI may seek
information about other loans obtained by the borrower.
3333
37. Someexamplesontheeligibility oftheborrowers
Name of the
Borrower
Overall
Outstanding of the
Borrower across
MLIs
(INR Crore)
Overall
Outstanding of
the Borrower
with MLI (INR
Crore)
DPD of borrower
as on 29th Feb
2020 (Days)
Turnover as per
latest available
financials (INR
Crore)
Borrower A 30 15 30 90 Not eligible
Borrower B 30 15 62 90 Not eligible
Borrower C 25 25 59 75 Eligible
Borrower D 15 10 0 80 Eligible
Borrower E 20 10 0 125 Not eligible
3737
39. InterestRateofCreditundertheScheme
For Banks and FIs, lending rate linked to one of the external benchmark
rates prescribed by RBI +1% subject to a maximum of 9.25% per annum.
For NBFCs, the interest rate on GECL shall not exceed 14% per annum
Since the additional pre-approved facility is to be provided to existing
customers, no additional processing fee shall be charged by MLIs to
borrowers.
No penal interest due to any non-compliance of the already accepted
covenants on the existing credit facilities may be charged on additional
loans during the sanction time.
3939
41. Security
The additional WCTL (in case of banks and FIs)/ Term loan (in case of NBFCs) facility granted under
GECL shall rank pari passu with the existing credit facilities in terms of cash flows and security, with
charge on the assets financed under the Scheme to be created within a period of three months
from the date of disbursal.
No additional collateral shall be asked for additional funding under GECL
4141
42. Security
Say the primary loan is a working capital loan given to a business and has a residual tenure of 24 months. The
loan is secured by a mortgage of immovable property. Now, GECL facility is granted, and the same has a tenure of
48 months. After 24 months, when the primary loan is fully discharged, can the borrower claim the release of the
collateral, that is, the mortgage?
4242
43. Security
Say the primary loan is a working capital loan given to a business and has a residual tenure of 24 months. The
loan is secured by a mortgage of immovable property. Now, GECL facility is granted, and the same has a tenure of
48 months. After 24 months, when the primary loan is fully discharged, can the borrower claim the release of the
collateral, that is, the mortgage?
Not at all. The grant of the GECL facility is a grant of an additional facility, with the same collateral. Therefore, until
the GECL loan is fully repaid, there is no question of the borrower getting a release of the collateral.
4343
44. Cash Flows
The Scheme provides that the primary facility and the GECL facility shall rank pari passu, in terms of cash flows.
What is the meaning of pari passu sharing of cashflows?
4444
45. Cash Flows
The Scheme provides that the primary facility and the GECL facility shall rank pari passu, in terms of cash flows.
What is the meaning of pari passu sharing of cashflows?
The sharing of cashflows on pari passu basis should mean, if there are unappropriated payments made by the
borrower, the payment made by the borrower should be split between the primary facility and the GECL facility on
proportionate basis, proportional to the respective amounts falling/fallen due.
4545
47. LoanAmounteligibleundertheGuaranteeCoverage
In the form of additional working capital term loan facility (in case of banks and Financial Institutions), and
additional term loan facility (in case of NBFCs) would be up to 20% of their total outstanding loans up to Rs. 25
crore as on 29th February, 2020.
Total Outstanding Amount would comprise 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.
MLIs are expected to check with credit bureau the overall outstanding of the borrower to assess the overall
additional loan amount eligible for sanction under the Scheme.
MLIs would be required to open a separate account for Credit Facility extended through the Scheme
Loans extended through PMEGP, PMMY etc. would be categorized under that scheme as earlier. WCTL/Term
Loans under this Scheme shall be over and above the existing loan.
4747
48. Cont.…
In case a borrower has existing limits with multiple lenders, GECL may be availed either through one
lender or multiple lenders depending upon the agreement between the borrower and the MLI.
In case the borrower wishes to take from any lender an amount more than the proportional 20% of the
outstanding credit that the borrower has with that particular lender, a No Objection Certificate (NOC)
would be required from all other lenders.
No NOC will, however, be required if the GECL availed from a particular lender is limited to the
proportional 20% of the outstanding credit that the borrower has with that lender.
MLIs are expected to have simple and enabling criteria to assess the borrower eligibility. Since the loans
are being provided to existing borrowers it is expected that the time required for due diligence would be
minimal in nature. MLIs should work towards enabling access of this facility to all the eligible borrowers
by educating borrowers regarding the Scheme and steps to avail credit under the Scheme.
4848
49. ExamplestocalculatetheloanamountcoveredundertheGuarantee
coverage:-
Name of the
Borrower
Overall
Outstanding
of the
Borrower
across MLIs
(INR Crore)
Overall
Outstanding
of the
Borrower
with MLI
(INR Crore)
Total
Maximum
Loan Amount
allowed under
the scheme
(INR Crore)
Total
Maximum
Loan Amount
allowed
without NOC
for MLI
(INR Crore)
A B C= 20% of A D= 20% of B
Borrower A 20 15 4 3
Borrower B 5 2 1 0.4
Borrower C 25 25 5 5
Borrower D 15 10 3 2
4949
50. Guarantee Fee
Extent of the
Guarantee Coverage
No Guarantee Fee shall be
charged from the MLIs by
NCGTC for the Credit
facilities provided under
the Scheme.
The Trustee Company shall
Provide 100% Guarantee
coverage on the
outstanding amount for
the credit facility provided
under the Scheme as on
the date of NPA.
5050
51. Invocation of
guarantee
The Member Lending Institutions
(MLIs) are required to inform the
date on which the account was
classified as NPA within 90 days
of the account being classified as
NPA
The Trustee Company shall pay 75%
of the guaranteed amount within 30
days of preferring of eligible claim
by the lending institution, subject to
the claim being otherwise found in
order and complete in all respects.
The balance 25% of the
guaranteed amount will be paid
on conclusion of recovery
proceedings or till the decree
gets time barred, whichever is
earlier.
5151
52. Appropriation of amount realized by the lending institution
in respect of a credit facility after the guarantee has been
invoked
Post invocation of the guarantee claim, if any recoveries are made in the account, MLIs shall
first adjust such recoveries towards the legal costs incurred by them for recovery of the
amount and shall thereafter remit to NCGTC the balance recoveries.
5252
53. Few Questions
What is the meaning of the term “business enterprise” which is defined as one of the Eligible
Borrowers?
One of the Eligible Borrowers is an MSME. Is it necessary that the entity is registered i.e. has a
valid Udyog Aadhaar Number, as required under the MSMED Act?
For the borrowers to give a self-declaration of turnover for FY 2019-20, is there a particular
form of declaration?
Is the Scheme restrictive as to the nature of the existing facility? Can the GECL be different
from the existing facility?
Is there a relevance of the residual tenure of the primary facility? For example, if the primary
facility is maturing within the next 6 months, is it okay for the MLI to grant a GECL for 4 years?
5353
55. Cont.….
• An online electronic platform and an institutional mechanism for factoring of trade
receivables of MSME sellers.
• It enables discounting of invoices through an auction mechanism to ensure prompt
realisation of trade receivables.
• RBI had released Guidelines for setting up of and operating TReDS on December 3,
20142 (‘Guidelines’).
• The Guidelines outline the requirements and the basic tenets of operating as a
TReDS platform and also prescribes the eligibility criteria for entities desirous of
setting up and operating such a system.
5555
56. The buyer sends purchase
Order to MSME seller
Financers registered will
Quote their bids against the
factoring unit
Factoring unit to be tagged
as ‘financed’ once the bids
are accepted by MSME’s and
the payment of fund
The seller deliver goods with
invoices / bills of exchange
Each module for a factoring
unit which could be entire
bill amount / in multiple of
pre determined face value
fore financers
On due date corporate
buyers will pay to the
financers
The MSME seller creates a
‘factory unit’ on TReDS
The ‘factory units 'are
verified by the corporates
buyers and TReDS provides a
filtering platform
Unfinanced factoring unit
to be settled with the
corporate buyer outside
the TReDS platform.