Cal. HC: Cannot Differentiate Between Contractual and Permanent Employees For Maternity Leave  ||  Supreme Court: Entering Into Sale Agreement With Minor is Void and Unenforceable  ||  SC: Information Disclosing Cognizable Offence to Be Recorded as FIR & Not in General Diary  ||  Delhi High Court: Deployment of CISF Personnel Shall be Based on Operational Requirements  ||  All. HC: Returning Unpaid Check With Endorsement of Account Closed Amounts to Dishnonor of Cheque  ||  Karnataka HC: Courts Should Ensure That Legal Procedures Are Not Abused in Order to Reduce Burden  ||  Utt. HC: Joining in Service Cannot Be Denied to Woman on The Ground of Her Pregnancy  ||  Kar. HC: Can’t Stretch Protection u/a 21 to Those Posing Threat to Nation’s Sovereignty & Integrity  ||  Delhi High Court: Can’t Stop Student From Entering Exam Hall Once Admit Card Issued  ||  Supreme Court Asks Medical Colleges Either to Pay Stipend or Not Have Internship    

Cabinet Approves "Partial Credit Guarantee Scheme" - (11 Dec 2019)


The Union Cabinet, chaired by the Prime Minister has given its approval to the "Partial Credit Guarantee Scheme", set to be offered by the Government of India (Gol) to Public Sector Banks (PSBs) for purchasing high-rated pooled assets from financially sound Non-Banking Financial Companies (NBFCs) / Housing Finance Companies (HFCs). The amount of overall guarantee is limited to first loss of up to 10 per cent of fair value of assets being purchased by the banks under the Scheme, or Rs. 10,000 crore, whichever is lower, as agreed by Department of Economic Affairs (DEA). Further, the scheme would cover NBFCs / HFCs that may have slipped into SMA-0 category during the one year period prior to 1.8.2018, and asset pools rated "BBB+" or higher.

The window for one-time partial credit guarantee offered by Gol will remain open till 30th June, 2020 or till such date by which Rs. 1,00,000 crore assets get purchased by the Banks, whichever is earlier. The Finance Minister is delegated with power to extend the validity of the Scheme by up to three months taking into account its progress. The proposed Government Guarantee support and resultant pool buyouts will help address NBFCs/HFCs resolve their temporary liquidity or cash flow mismatch issues, and enable them to continue contributing to credit creation and providing last mile lending to borrowers, thereby spurring economic growth.

In pursuance of the announcement made in the Union Budget 2019-20 presented by the Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman, the Government has issued a scheme regarding partial credit guarantee on 10th August, 2019. It was decided to obtain approval of the Cabinet on the Scheme to provide liquidity to the NBFC Sector and, in turn, enable them to continue to play their role in meeting the financing requirements of the productive sectors of economy including MSME, retail and housing. The Scheme offered to Public Sector Banks will help address temporary liquidity / cash flow mismatch issues of otherwise solvent NBFCs / HFCs without them having to resort to distress sale of their assets for meeting their commitments. Further, this will provide liquidity to the NBFC / HFC concerned for financing the credit demand of the economy, and also protect the financial system of the country from any adverse effect that may arise due to the failure of NBFCs / HFCs.


Share :        

Disclaimer | Copyright 2024 - All Rights Reserved