In the Rs 20 lakh crore fiscal stimulus announced by the government, there is a credit line to MSMEs worth Rs 3 lakh crore which is going to be 100 percent backed by CG and covers both interest and principal. Additionally, the government plans to provide Rs 20,000 crore of subordinate debt to MSME promoters which could be used as equity. The government will provide Rs 4000 crore to CGTSME which in turn will provide partial credit guarantee to banks under this scheme. The other schemes provide full and partial guarantees to NBFCs, HFCs and MFIs to enable them to raise liquidity and capital. Thus, we are back to not just CGs but the possibility of multiple CGs being governed by multiple agencies. … [Read more...] about Credit guarantees of 1970s make a comeback
Credit guarantee fund
All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore are eligible for GECL funding under the scheme. … [Read more...] about Banks sanctions about Rs 1.14 lakh crore loans to MSMEs under credit guarantee scheme
NEW DELHI: The finance ministry on Tuesday said banks have sanctioned loans of about Rs 1,14,502 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector reeling under the economic slowdown caused by the COVID-19 pandemic.However, disbursements against this stood at Rs 56,091.18 lakh crore till July 4 under the 100 per cent ECLGS for micro, small and medium enterprises (MSMEs).The scheme is the biggest fiscal component of the Rs 20-lakh crore 'Aatmanirbhar Bharat Abhiyan' package announced by Finance Minister Nirmala Sitharaman in May.The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 20 private sector banks and 10 non-banking financial companies (NBFCs)."As of 4 July 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,14,502.58 crore, of which Rs 56,091.18 crore has already been disbursed," the … [Read more...] about Banks sanction about Rs 1.14 lakh crore loans to MSMEs under credit guarantee scheme
the State Bank of India. In March this year, Finance and Corporate Affairs Nirmala Sitharaman had announced the special scheme with a view to improve the liquidity position of non-banking financial companies (NBFCs) as well as housing finance companies (HFCs). In a notification on Wednesday, the Reserve Bank of India (RBI) said the SPV will purchase the short-term papers from eligible NBFCs/HFCs, which shall utilise the proceeds under this scheme solely for the purpose of extinguishing existing liabilities. The central bank also laid down the conditions which the NBFCs and HFCs will have to meet to become eligible to avail the scheme. The RBI will provide funds for the special liquidity scheme by subscribing to government guaranteed special securities issued by the SLS Trust set up by SBI Capital Markets Limited (SBICAP), said a finance ministry release. "The total amount of such securities issued outstanding shall not exceed Rs 30,000 crore at any point of time," it said. The … [Read more...] about Government launches Rs 30K cr special liquidity scheme for NBFCs
Debt mutual funds invest in fixed income securities like bonds, government securities, Treasury bills, among others. As per Sebi's categorisation and rationalisation norms, there are 16 debt mutual fund categories. The market regulator has categorised debt schemes based on where they invest their corpus. Sebi issued comprehensive norms on categorisation and rationalisation of mutual funds in October 2018. Debt mutual fund categories differ greatly. Some of the schemes invest in short-term securities, while some others invest in securities with long tenure. They also have varying degrees of risk. Therefore, it is extremely important for investors to choose a category that is in line with their investment horizon and risk profile. As a rule, if you have a very low risk and do not want to take interest rate risks, you should stick to short debt schemes like liquid funds, ultra short duration funds, short duration funds, etc. Similarly, if you do not want to take too much risk, … [Read more...] about What are debt mutual funds?