The Rs 3 lakh crore guaranteed emergency credit line (GECL) was announced by the government as part of the Rs 21 lakh crore package. According to a set of FAQs, GECL is a loan for which a 100% guarantee would be provided by the National Credit Guarantee Trustee Company to member lending institutions (MLIs) – banks, financial institutions and NBFC.
The FAQs were published by the National Credit Guarantee Trustee Company (NCGTC).
The loan will be provided in the form of an additional working capital term loan facility in the case of banks and an additional term loan facility in the case of NBFCs to eligible MSMEs / businesses and interested borrowers from Pradhan Mantri Mudra Yojana (PMMY).
Frequently Asked Questions (FAQs) said the program is a specific response to the unprecedented situation created by COVID-19.
It aims to provide much needed relief to the MSME sector by incentivizing lending institutions to provide additional credit of up to Rs 3 lakh crore at low cost, thus enabling MSMEs to meet their operational obligations and restart. their activities.
“This is a pre-approved loan. An offer will be sent by MLI to eligible borrowers for a pre-approved loan that the borrower can choose to accept. If the MSME accepts the offer, it will have to complete. the required documentation, “It said.
An opt-out option will be offered to eligible borrowers and if a borrower is not interested in availing the loan, they can indicate it accordingly.