Canara Bank to MSMEs, Get GECL Loans in 5 Days

Canara Bank to MSMEs, Get GECL Loans in 5 Days – Canara Bank has directed its branch offices to process and disburse additional working capital loans or term loans to help MSMEs and other borrowers overcome coronavirus impact under Guaranteed Emergency Credit Line (GECL) in 5 days. Bank has issued a circular in this regard to their branches and SME’s hub. GECL has come as reassurance for struggling firms which fear banks could take a long time in processing their applications.

Bank has, however, advised its branches to ensure that additional credit limit is used strictly for intended purpose. GECL loan amount disbursed under the scheme will go to meet operating liabilities and restarting of operations of the unit.

The Canara Bank has also clarified that since the facility is extended against 100% guarantee provided by National Credit Guarantee Trustee Company Ltd (NCGTC), no separate collateral security needs to be obtained. However, the existing primary and collateral securities already available with the Bank should be extended for this facility.

Also read – How Will Rs 3 Lakh Crore Emergency Credit Line (GECL) Work ?

The government had recently announced Rs 3 lakh crore collateral-free and government guaranteed loans for MSMEs, traders, Mudra borrowers and other eligible firms. The scheme covers existing borrowers with outstanding credit limit of up to Rs 25 crore as on 29 February 2020 and a turnover of up to Rs 100 crore. They are eligible for upto 20% of their entire outstanding loans as emergency credit line.

The interest rate charged by banks and financial institutions has been capped at 9.25% for the guaranteed emergency credit line (GECL). In case of NBFCs, the upper limit of interest rate is 14%.