- The objective of the scheme is to provide personal loan through banks to the promoters of stressed MSMEs for infusion as equity / quasi equity in the business eligible for restructuring, as per RBI guidelines for restructuring of stressed MSME advances.
- To provide guarantee coverage for the CGSSD to provide Sub-Debt support in respect of restructuring of MSMEs.
RBI vide circular No DoR.BP.BC.No.01/21.04.048/2020-21 dated July 01,2020 as a special dispensation, has permitted banks to reckon the funds infused by the promoters in their MSME units through loans availed under the captioned scheme as equity/quasi equity from the promoters for debt-equity computation.
- The Scheme is applicable for those MSMEs whose accounts have been standard as on 31.03.2018 and have been in regular operations, either as standard accounts(SMA-2), or as NPA accounts during financial year 2018-19 and financial year 2019-20.
- Fraud / Willful defaulter accounts will not be considered under the proposed scheme.
- Personal loan will be provided to the promoters of the MSME units. The MSME itself may be Proprietorship, Partnership, Private Limited Company or registered company etc.
- The Scheme is valid for MSME units which are stressed, viz. SMA-2 and NPA accounts as on 30.04.2020 who are eligible for restructuring as per RBI guidelines on the books of the Lending institutions.
Promoter(s) of the MSME unit will be given credit facility equal to 15 % of his/her stake in the MSME entity (equity plus debt) or Rs 75 lakh whichever is lower as per last audited Balance Sheet.
The Equity shall be calculated on the basis of the last available audited balance sheet of a Financial YearIn case a borrower has existing limits with more than one lender, the CGSSD can be availed by the borrower through one lender only. A declaration from the borrower regarding its other banking arrangements and that it has not availed funding under the scheme from the other lenders to be obtained.
The sub-debt facility so sanctioned by Bank will have 2nd charge of the assets financed under existing facilities for the entire tenor of the sub-debt facility.
For this scheme, 90% guarantee coverage would come from scheme/ CGTMSE and remaining 10% from the concerned promoter(s).
- The maximum tenor for repayment will be 10 years. There will be a moratorium of upto 7 years (maximum) on the payment of principal & the interest on the sub-debt under the scheme would be required to be serviced regularly (monthly),
- The principal shall be repaid within a maximum of 3 years after completion of moratorium.
- Pre-payment of loan is permitted at no additional charge / penalty to the borrower.
- RLLR+2% (Floating)
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 an amount of Rs 20,000 crore of guarantee amount is approved.
- 1.50% per annum on the guaranteed amount on outstanding basis.
- Guarantee fee to be borne by the borrowers