In a bid to improve medical infrastructure in non-metros, the National Credit Guarantee Trustee Company Ltd (NCGTC) on Friday issued operational guidelines for the Rs 50,000-crore credit guarantee scheme announced as part of Rs 6.29-lakh-crore stimulus package last month by Finance Minister Nirmala Sitharaman. The loans under the Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) would be available at a concessional rate of not more than 7.95 per cent, as was announced by the financial minister and later approved by the Union Cabinet.
While announcing the scheme, Sitharaman had said, “A maximum loan of Rs 100 crore will be given with a capped interest rate of 7.95 per cent (for healthcare projects) and guarantee provided for three years. Without a guarantee, it would have cost 10-11 per cent.”
The scheme would be applicable to all eligible loans sanctioned during the period from May 7, 2021, till March 31, 2022, or till guarantees for an amount of Rs 50,000 crore are issued under the scheme, whichever is earlier, the guidelines said.
The credit guarantee scheme for setting up of medical or health infrastructure by private hospitals in cities other than eight metropolitan cities, is for both greenfield (new) and brownfield (existing) projects.
As per the guidelines, a credit guarantee of 50 per cent to all brownfield projects and 75 per cent to greenfield projects in the healthcare sector at centres other than 8 municipal areas would be available. The excluded metros from the scheme are Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune.
For the aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects shall be 75 per cent, it said.
There will be no guarantee fee charged from the lending institution by NCGTC for the credit facilities provided under the scheme, it added.
Guarantee for loan up to Rs 100 crore per project will be valid up to two years from the date of commencement of commercial operations (DCCO), subject to maximum period of 5 years from the date of first disbursement, it said.
The scheme will encourage creation of private medical infrastructure in various parts of the country.
“The lender should create charge on the existing and proposed assets/securities, as per its stipulation.
“NCGTC shall have second charge on the assets financed under the scheme (under both greenfield and brownfield projects), to be created within a reasonable period of time from the date of disbursal, but in any case before the account turning NPA (non-performing asset),” it said.
Any changes to the structure of the scheme, including but not limited to the eligibility criteria, guarantee fee, rate of interest and tenor of loans under the scheme, would be decided by the management committee for the LGSCAS Fund, it added.
Besides, NCGTC has also issued separate guidelines for the credit guarantee scheme for MFIs also announced as part of the stimulus package.
The scheme is aimed at providing guarantee coverage to eligible lending institutions for the funding provided by them to NBFC-MFIs or MFIs for on-lending to eligible small borrowers in the context of the COVID-19 pandemic.
The scheme would come into force from the date of issue of these guidelines by NCGTC. It shall cover funding provided by the member lending institutions (MLIs) to MFIs/NBFC-MFIs till March 31, 2022 or till guarantees for an amount of Rs 7,500 crore are issued, whichever is earlier.
Microfinance institutions (MFIs) would be eligible for loans at one-year marginal cost-based lending rate plus 2 per cent per annum.
The funding provided by the lenders would be guaranteed by NCGTC to the extent of 75 per cent of amount in default for a maximum period of three years, it said.
The loan extended to the NBFC-MFIs/MFIs could be for longer period. However, tenor of NCGTC’s guarantee would be for a maximum period of three years.
No guarantee fee would be charged from the lenders by NCGTC for the credit facilities provided under the scheme, it added. DP HRS hrs