Cabinet approves creation of a Credit Guarantee Fund for MUDRA loans
Updated: Jan 06, 2016 02:55:00pm
New Delhi, Jan 6 (KNN) A Credit Guarantee Fund for Micro Units Development Refinance Agency (MUDRA) loans will be created and the MUDRA Ltd will be converted into MUDRA Small Industries Development Bank of India (SIDBI) as a wholly owned subsidy of SIDBI.
The decision has been taken by Union Cabinet during a meeting chaired by Prime Minister Narendra Modi.
The Fund is expected to guarantee more than Rs 1,00,000 crore worth of loans to micro and small units in the first instance, the Cabinet said in a release.
The scheme assures establishment of CGFMU for guaranteeing loans sanctioned under Pradhan Mantri Mudra Yojana with effect from 8th April, 2015, with the objective to reduce the credit risk to Banks / NBFCs / MFIs / other financial intermediaries, who are Member Lending Institutions (MLIs).
The National Credit Guarantee Trustee Company Ltd. (NCGTC Ltd.), a wholly-owned company of Government of India, constituted under the Companies Act, 1956 (2013) to manage and operate various credit guarantee funds, shall be the Trustee of the Fund.
Under the scheme, the guarantee would be provided on portfolio basis to a maximum extent of 50% of Amount in Default in the portfolio.
The MUDRA (SIDBI) Bank will undertake refinance operations and provide support services with focus on portal management; data analysis etc. apart from any other activity entrusted/ advised by Government of India. (KNN Bureau/ With PIB Inputs)
The decision has been taken by Union Cabinet during a meeting chaired by Prime Minister Narendra Modi.
The Fund is expected to guarantee more than Rs 1,00,000 crore worth of loans to micro and small units in the first instance, the Cabinet said in a release.
The scheme assures establishment of CGFMU for guaranteeing loans sanctioned under Pradhan Mantri Mudra Yojana with effect from 8th April, 2015, with the objective to reduce the credit risk to Banks / NBFCs / MFIs / other financial intermediaries, who are Member Lending Institutions (MLIs).
The National Credit Guarantee Trustee Company Ltd. (NCGTC Ltd.), a wholly-owned company of Government of India, constituted under the Companies Act, 1956 (2013) to manage and operate various credit guarantee funds, shall be the Trustee of the Fund.
Under the scheme, the guarantee would be provided on portfolio basis to a maximum extent of 50% of Amount in Default in the portfolio.
The MUDRA (SIDBI) Bank will undertake refinance operations and provide support services with focus on portal management; data analysis etc. apart from any other activity entrusted/ advised by Government of India. (KNN Bureau/ With PIB Inputs)
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