New criteria for the classification of MSME effective from July 1, 2020

[Definition of Micro, Small and Medium Enterprises as per Section 7 (I) of the Micro Small and Medium Enterprises Development Act, 2006 modified with effect from July 1,2020] Government of India (GoI), vide Gazette Notification S.O. 2119 (E) dated June 26, 2020, has notified new criteria for classifying the enterprises as Micro, Small, and Medium…

What is Emergency Credit Line Guarantee Scheme –ECLGS?

Emergency Credit Line Guarantee Scheme (ECLGS) which is also known as Guaranteed Emergency Credit Line (GECL) scheme is a 100% collateral free fund-based working capital term loan extended by the banks, NBFCs and Financial Institutions (FIs) to Business entities /MSMEs including borrowers of MUDRA loans constituted as Proprietorship, Partnership, a registered company, trusts, and Limited…

What is NCLT?

The National Company Law Tribunal (NCLT) is the adjudicating authority (quasi-judicial authority) for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.    Previously, there were four different legal forums viz. High Courts, Company Law Boards, Board for Industrial and Financial Reconstruction (BIFR), and Debt Recovery Tribunal (DRT)…

Loans to Stressed MSMEs: Is guarantee comes from GGTMSE instead of a sovereign guarantee?

According to news reports, Bankers are unhappy to learn that the newly envisaged Rs.20000 crore loan guarantee scheme for micro, small and medium enterprises (MSMEs) will not be available from the Government of India as expected but from the credit guarantee trust fund for micro and small enterprises (CGTMSE). CGTMSE guarantee has its caveats, it…