New Delhi, Aug 18 (KNN) The Union Finance Ministry has extended the validity of its Partial Credit Guarantee Scheme (PCGS) 2.0 by three months to November 19, 2020, to build the portfolio.

Its scope was extended to provide greater flexibility to the state-owned banks in purchasing bonds and commercial papers of the non-banking financial companies (NBFCs).

The Finance Ministry said the portfolio level of AA and AA- investment sub-portfolio will be extended to 50 per cent instead of 25 per cent stipulated earlier of the total portfolio of Bonds and CPs purchased by public sector banks (PSBs) under the scheme.

As part of Aatmanirbhar Bharat Abhiyan, announced by the government, Partial Credit Guarantee Scheme (PCGS) 2.0 was launched on 20.05.2020 to provide portfolio guarantee for purchase of bonds or commercial papers (CPs) with a rating of AA and below issued by NBFCs/HFCs/ MFIs by Public Sector Banks (PSBs). It was envisaged to purchase Bonds/ CPs of Rs. 45,000 crore under PCGS 2.0 of which the maximum headroom permissible for purchase of Bonds/ CPs rated AA/AA- was 25% of the total portfolio i.e. Rs. 11,250 crore.

In addition, the government had separately announced the special liquidity scheme for purchase of commercial papers (CPs) and Non-Convertible Debentures (NCDs) issued by NBFCs/HFCs with a residual maturity of upto 3 months, which could be extended for a further period of upto 3 months, of a total value not exceeding Rs. 30,000 crore to be extended by the amount required as per need.