The Guaranteed Emergency Credit Line (GECL) of Rs 3 lakh crore was announced as part of Rs 21 lakh crore package by the government. As per a set of FAQs, GECL is a loan for which 100 per cent guarantee would be provided by National Credit Guarantee Trustee Company to Member Lending Institutions (MLIs) — banks, financial institutions and NBFCs.
The FAQs were issued by National Credit Guarantee Trustee Company (NCGTC).
The loan will be extended in the form of additional working capital term loan facility in case of banks and additional term loan facility in case of NBFCs to eligible MSMEs/ business enterprises and interested Pradhan Mantri Mudra Yojana (PMMY) borrowers.
The Frequently Asked Questions (FAQs) said the scheme is a specific response to the unprecedented situation created by COVID-19.
It seeks to provide much-needed relief to the MSME sector by incentivising lending institutions to provide additional credit of up to Rs 3 lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.
“This is a pre-approved loan. An offer will go out from the MLI to the eligible borrowers for a pre-approved loan which the borrower may choose to accept. If the MSME accepts the offer, it will be required to complete requisite documentation,” it said.
An ‘opt-out’ option will be provided to eligible borrowers and if a borrower is not interested in availing the loan, he/she may indicate accordingly.
Read Complete guide to MSME Loan, Eligibility and Benefits