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The Guaranteed Emergency Credit Line (GECL) is a loan for which 100% guarantee would be provided by National Credit Guarantee Trustee Company (NCGTC) to the Bank , and which will be extended in the form of additional working capital term loan facility to eligible MSMEs/ Business Enterprises and interested Pradhan Mantri Mudra Yojana (PMMY) borrowers. Credit under GECL would be up to 20% of the borrower’s total outstanding credit up to Rs. 25 crore, excluding off-balance sheet and non-fund based exposures, as on Feb 29, 2020, i.e., additional credit shall be up to Rs. 5 crore.


To access the Scheme Details Click Here and to access Operational Guidelines by Government visit




Q. What is the objective of the Scheme?

The Scheme is a specific response to the unprecedented situation COVID-19 to enable MSMEs/Business enterprises to meet their operational liabilities and restart their businesses.


Q. What is the duration of the Scheme?

The Scheme would be applicable to all loans sanctioned under GECL during the period from May 23, 2020 to Oct 31, 2020, or till an amount of Rs. 3 lakh crore is sanctioned under GECL across all bank and lending institutions, whichever is earlier.


Q. What will be the eligibility criteria for MSMEs to avail the benefit of the Scheme?

The eligibility criteria under the Scheme are as under:

  • All MSME borrower accounts with combined fund based outstanding loans across all Lending institutions up to Rs. 25 crore as on Feb 29, 2020, and annual turnover of up to Rs. 100 crore in FY 2019-20. In case accounts for FY 2019-20 are yet to be audited/finalized, then Bank may rely upon the borrower’s declaration of turnover or GST returns.
  • The Scheme is valid only for existing customers on the books of the MLI.
  • Borrower accounts should be classified as regular, SMA-0 or SMA-1 as on Feb 29, 2020. Accounts classified as NPA or SMA-2 as on Feb 29, 2020 will not be eligible under the Scheme.
  • The borrower must be GST registered in all cases where such registration is mandatory. This condition will not apply to borrowers that are not required to obtain GST registration.


Q. Borrowers under which constitutions are eligible to avail this scheme?

Proprietorship firms, partnership firms, limited liability partnerships (LLPs), registered companies and trusts are eligible.


Q. Will GECL be extended as a separate loan account, or as part of the existing loan account of the borrower?

A separate loan account shall be opened for the borrower for extending additional credit under GECL. This account will be distinct from the existing loan account(s) of the borrower.


Q. Will loans under the Scheme be automatically given without any application or solicitation from the borrower?

This is a pre-approved loan. An offer will be sent by YBL to all the eligible borrowers for a pre-approved loan which the borrower may choose to accept. If the borrowing entity decides to avail the loan, it will be required to complete requisite documentation. Thus, an Opt-Out option will be provided to eligible borrowers under the Scheme, i.e., if the borrower is not interested in availing the loan, he/she may indicate accordingly and choose Opt-Out option.


Q. What would be the procedure followed in case a borrower has loan accounts with multiple lenders?

  • In case a borrower has existing limits with multiple lenders, GECL may be availed either through one lender or each of the current lenders in proportion depending upon the agreement between the borrower and all the Lending Institutions.
  • In case the borrower wishes to take from any lender an amount more than the proportional 20% of the outstanding credit that the borrower has with that particular lender, a No Objection Certificate (NOC) would be required from all other lenders.
  • No NOC will, however, be required if the GECL availed from a particular lender is limited to the proportional 20% of the outstanding credit that the borrower has with that lender.


Q. Will the interest rate on GECL be capped?

Yes, interest rates on GECL are capped at External benchmark rate + Bank’s internal spread + 1% subject to maximum of 9.25% per annum.


Q. What would be the tenor of loans provided under GECL?

The tenor of loans provided under GECL shall be four years from the date of disbursement. No pre-payment penalty shall, however, be charged by the bank in case of early repayment for this facility.


Q. Is there any moratorium period prescribed under the Scheme?

Yes, a moratorium period of one year on the principal amount shall be provided for GECL funding. Interest shall, however, be payable monthly during the moratorium period. The principal shall be repaid in 36 instalments after the moratorium period is over.


Q. Will any guarantee fee be charged under the Scheme by NCGTC?

As per current guidelines, NCGTC will not charge any guarantee fee under the Scheme.


Q. Will any processing fee be charged by YBL for sanction of loans under GECL?

No. Bank shall not charge and processing fees on the GECL loan.


Q. Will YBL ask for any additional collateral for the GECL facility?

No additional collateral shall be asked by YBL for additional credit extended under GECL.


To view complete list of FAQs , kindly refer here.

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