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Consider the following statements about the Emergency Credit Line Guarantee scheme.
- It provides 100% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC)
- Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
Which of the above statement is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements about the Emergency Credit Line Guar...
Explanation:
The Emergency Credit Line Guarantee Scheme (ECLGS) was launched by the Government of India to provide financial assistance to the Micro, Small, and Medium Enterprises (MSMEs) sector affected by the COVID-19 pandemic. Let's analyze the given statements:
Statement 1: It provides 100% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC)
- This statement is correct.
- The Emergency Credit Line Guarantee Scheme provides a 100% guarantee coverage on loans provided by Member Lending Institutions (MLIs) to eligible MSMEs.
- The guarantee coverage is provided by the National Credit Guarantee Trustee Company Limited (NCGTC).
- The guarantee coverage ensures that in case of default by the borrower, the MLIs will be reimbursed by the NCGTC up to the guaranteed amount.
Statement 2: Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
- This statement is incorrect.
- Under the Emergency Credit Line Guarantee Scheme, the guarantee fee is not charged by the NCGTC from the MLIs.
- The Government of India has decided to bear the entire fee charged by the NCGTC on behalf of the MLIs.
- This is done to provide relief to the MSMEs and encourage them to avail the benefits of the scheme without any additional financial burden.
Therefore, only the first statement is correct, and the correct answer is option 'A' - 1 only.
Key Points:
- Emergency Credit Line Guarantee Scheme (ECLGS) provides financial assistance to MSMEs affected by the COVID-19 pandemic.
- It provides a 100% guarantee coverage by the NCGTC on loans provided by MLIs.
- The guarantee fee is not charged by the NCGTC from the MLIs under the scheme.
- The Government of India bears the entire fee charged by the NCGTC on behalf of the MLIs.
- The scheme aims to provide liquidity support to MSMEs and enable them to meet their operational liabilities and restart their businesses.
The Emergency Credit Line Guarantee Scheme (ECLGS) was launched by the Government of India to provide financial assistance to the Micro, Small, and Medium Enterprises (MSMEs) sector affected by the COVID-19 pandemic. Let's analyze the given statements:
Statement 1: It provides 100% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC)
- This statement is correct.
- The Emergency Credit Line Guarantee Scheme provides a 100% guarantee coverage on loans provided by Member Lending Institutions (MLIs) to eligible MSMEs.
- The guarantee coverage is provided by the National Credit Guarantee Trustee Company Limited (NCGTC).
- The guarantee coverage ensures that in case of default by the borrower, the MLIs will be reimbursed by the NCGTC up to the guaranteed amount.
Statement 2: Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
- This statement is incorrect.
- Under the Emergency Credit Line Guarantee Scheme, the guarantee fee is not charged by the NCGTC from the MLIs.
- The Government of India has decided to bear the entire fee charged by the NCGTC on behalf of the MLIs.
- This is done to provide relief to the MSMEs and encourage them to avail the benefits of the scheme without any additional financial burden.
Therefore, only the first statement is correct, and the correct answer is option 'A' - 1 only.
Key Points:
- Emergency Credit Line Guarantee Scheme (ECLGS) provides financial assistance to MSMEs affected by the COVID-19 pandemic.
- It provides a 100% guarantee coverage by the NCGTC on loans provided by MLIs.
- The guarantee fee is not charged by the NCGTC from the MLIs under the scheme.
- The Government of India bears the entire fee charged by the NCGTC on behalf of the MLIs.
- The scheme aims to provide liquidity support to MSMEs and enable them to meet their operational liabilities and restart their businesses.
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Consider the following statements about the Emergency Credit Line Guar...
About Emergency Credit Line Guarantee Scheme (ECLGS)
- Under the Emergency Credit Line Guarantee Scheme (ECLGS) 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested MUDRA borrowers.
- The credit will be provided in the form of a Guaranteed Emergency Credit Line (GECL) facility.
- Tenor of the loan under Scheme shall be four years with a moratorium period of one year on the principal amount.
- No Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
- Interest rates under the Scheme shall be capped at 9.25% for banks and FIs, and at 14% for NBFCs.
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Consider the following statements about the Emergency Credit Line Guarantee scheme. It provides 100% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.Which of the above statement is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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