The Reserve Bank of India vide its notification dated 21st June 2020 has directed the member lending institutions to assign zero percent risk weight on the credit facilities extended under the Emergency Credit Line Guarantee Scheme to MSME borrowers announced by the government to the extent of guarantee coverage.
RBI in its earlier notification dated 23rd May 2020 announced the Emergency Credit Line Guarantee Scheme to MSME borrowers for providing 100 percent guarantee coverage for additional working capital term loans.
As credit facilities extended under the scheme guaranteed by NCGTC are backed by an unconditional and irrevocable guarantee provided by the Government of India, it has been decided that Member Lending Institutions shall assign zero percent risk weight on the credit facilities extended under this scheme to the extent of guarantee coverage.
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