New Delhi, Aug 19 (SocialNews.XYZ) The Union government has launched the Credit Guarantee Scheme for Subordinate Debt for MSMEs, thereby operationalising the Rs 20,000 crore distressed assets fund.
On Wednesday, the Ministry for MSMEs issued guidelines for the scheme which was announced under the Aatmanirbhar Bharat economic package.
In a tweet, the ministry said that all public sector banks along with some private banks are on board.
"Govt has given yet another facility for financially stressed MSMEs. The sub-debt scheme has been launched. All preparation is done. All PSU Banks and some Pvt Banks are on board," it said.
The scheme would be applicable to all credit facilities sanctioned under CGSSD for a maximum period of 10 years from the guarantee availment date or March 31, 2021 whichever is earlier, or till the amount of Rs 20,000 crore of guarantee amount is approved.
As per the guidelines, the scheme is applicable for those MSMEs whose accounts have been standard as of March 31, 2018 and have been in regular operations, either as standard accounts, or as NPA accounts during financial year 2018-19 and financial year 2019-20.
It will be valid for MSME units which are stressed, which are SMA-2 and NPA accounts as on April 30, 2020 who are eligible for restructuring as per the RBI guidelines.
"Under this arrangement, promoter(s) of the MSME unit will be given credit equal to 15 per cent of his/her stake (equity plus debt) or Rs 75 lakh whichever is lower," said the guideline.
Any guarantee approved under the scheme shall be over and above the existing loan/guarantee sanctioned by the trust.
Post-restructuring, NPA classification of these accounts shall be as per the extant income recognition and asset classification (IRAC) norms for banks.
Source: IANS
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