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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. 50 crore, excluding off-balance sheet and non-fund based exposures, as on Feb 29, 2020, i.e., additional credit shall be up to Rs. 10 crore.

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Scheme Details

For existing MSME/Business Entities customers of the Bank, YES Bank has approved the internal policy to provide Guaranteed Emergency Credit Line (GECL) facility in the form of Working Capital Term Loan. Detailed guidelines & norms that needs are as mentioned below –

  • Name of the Facility - Guaranteed Emergency Credit Line (GECL) by way of WCTL under ECLGS.

  • Facility Type - Working Capital Term Loan (WCTL)

  • Tenure

    1. Maximum 48 months with Principal moratorium of 12 months. Interest shall, however, be payable during the moratorium period.

    2. The Principal shall be repaid in Maximum 36 instalments after the moratorium period is over.

    3. Interest to be serviced as and when applied.

  • Validity of Scheme – Scheme will be in force from May 23, 2020 and upto a specific date or till INR 3 Lakh crore sanctioned limit by Ministry under the scheme is exhausted, whichever is earlier as informed by the ministry from time to time.

  • Purpose of the Scheme - To mitigate the economic distress faced by MSMEs due to Covid-19, Customer to utilize the funds to meet operating liabilities and for restarting operations after impact due to COVID-19.

  • Eligibility - All Borrower Accounts [Business Entities/MSME] constituted as Proprietorships, Partnerships, Registered Companies, Trusts, Limited Liability Partnerships (LLPs) and loans provided to individuals who have availed loans for business purposes satisfying below norms:

  1. Total Outstanding loans upto INR 50 Crs from all Member Lending Institutions (MLI) as on 29th Feb 2020.

  2. Total outstanding amount will comprise of the on balance sheet exposure. Off balance sheet and non-fund based exposure will be excluded

  3. Annual turnover upto INR 250 Crs in the previous financial year [2019-20]. In case Accounts of the borrower are yet to be audited bank will rely on the Borrower’s declaration about the Turnover [to be part of the customer request letter]

  4. The scheme is valid only for the existing customers on the books of the Bank as on 29th Feb 2020.

  5. Borrower account should be less than or equal to 60 days past due as on 29th Feb 2020 including for outside YBLs Loan. Borrower account which had NPA status or SMA-2 or Wilful defaulter status as on 29th Feb 2020 shall not be eligible under the scheme.

  6. The MSME borrower must be GST registered wherever it is mandatory (This condition will not apply to MSMEs that are not required to obtain GST registration)

  • Loan amount - Limit:

  1. Sole Lender - Max. 20% of the existing fund based outstanding of the borrower with YBL

  2. Multiple Lender –

    1. In case NOC not obtained from other lenders - Max. 20% of the existing fund based outstanding of the borrower with YBL

    2. In case NOC obtained from all other lenders - Max. 20% of the existing fund based outstanding of the borrower across all Member Lending Institutions (MLI)

    3. Maximum loan amount is INR 10 Cr

  3. The facility will be considered as an exposure on the borrower and guidelines stipulated under the RBI Prudential Norms and market mechanism shall be adhered to.

  • Margin – NIL

  • Security -

  1. The additional WCTL facility shall rank second charge with the existing credit facilities, in respect of underlying security and cash flows.

  2. Charge on Current Assets financed through the additional WCTL to be created.

  3. Extension of charge on all the securities taken for existing loan to ensure second charge.

  4. No additional collateral security required for additional funding under GECL

  • Guarantee Fee - NIL

  • Interest Rate - Interest rate to be EBLR + 1% subject to maximum 9.25% p.a.

  • Processing Fee - NIL

  • Prepayment Penalty - Nil for this facility

  • Penal Interest NIL penal interest due to non-compliance of already accepted covenants on the existing credit facilities may be charged on additional loans

To view complete list of Frequently Asked Questions, please Click Here.

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