These lenders have also requested the government to roll back changes made to the credit guarantee scheme and reinstate the guarantee cover to 75 per cent, which was brought down to 50 per cent.
“We urge upon the government that the guarantee cover may please be reinstated to earlier 75 per cent levels, particularly in these uncertain and stressful times,” NBFC industry body FIDC said in its representation. “Capping the maximum lending rate to 18 per cent as an eligibility criteria for guarantee cover, would defeat the very purpose. We, request you to not limit the lending rate and allow it to continue to be in accordance with RBI guidelines for NBFCs, which requires us not to charge exorbitant rates.”
As per recent changes made to the scheme, CGTMSE guarantee coverage is reduced to 50 per cent for NBFCs. Earlier, loan loss was covered to the extent of 75 per cent. Also, the payout cap is revised downwards to two times of receipts (guarantee fee paid plus recoveries remitted through the year). It was earlier capped at three times of receipts.
“These are nibbling matters at the macro level, which cannot be ignored,” said a senior executive, who is involved in discussions with the ministry.
