Emergency Credit Line Guarantee Scheme (ECLGS)
20-Aug-2020: Loans worth more than Rs 1 Lakh crore disbursed under ECLGS
Under the 100% Emergency Credit Line Guarantee Scheme (ECLGS) backed by a Government of India guarantee, Banks from Public & Private Sectors have sanctioned loans worth over Rs. 1.5 lakh crore as of 18th August, 2020, of which more than Rs 1 lakh crore has already been disbursed. The ECLGS was announced by the Government as a part of Aatma Nirbhar Bharat Package, to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially MSMEs.
Under the ECLGS, Public Sector Banks (PSBs) have sanctioned loans of Rs 76,044.44 crore, out of which Rs 56,483.41 crore has already been disbursed. Whereas Private Sector Banks have sanctioned loans of Rs 74,715.02 crore out of which Rs 45,762.36 crore has already been disbursed. The top lenders under the Scheme are State Bank of India (SBI), Canara Bank, Punjab National Bank (PNB), Bank of India, Union Bank of India and HDFC Bank Ltd.
Offline Retail Payments
6-Aug-2020: Offline Retail Payments using Cards / Wallets / Mobile Devices – Pilot
Over the years, the Reserve Bank has prioritised security measures for digital payments such as the requirement of Additional Factor of Authentication and online alerts for every transaction. These measures have significantly increased customer confidence and safety leading to increased adoption of digital payments.
Absence of, or erratic, internet connectivity, especially in remote areas, is a major impediment for adoption of digital payments. Availability of options to make offline payments, using cards, wallets or mobile devices could boost the adoption of digital payments.
To encourage technological innovations that enable offline digital transactions, Reserve Bank shall permit a pilot scheme to be conducted for a limited period. Under the pilot scheme, authorised Payment System Operators (PSOs) – banks and non-banks – will be able to provide offline payment solutions using cards, wallets or mobile devices for remote or proximity payments. The scheme would be subject to the conditions detailed in the Annex. Other entities having innovative solutions shall tie-up with the authorised PSOs.
The pilot scheme shall be undertaken till March 31, 2021 only. The Reserve Bank shall decide on formalising such a system based on the experience gained under the pilot.
This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
PILOT SCHEME FOR OFFLINE RETAIL PAYMENTS
Under the pilot scheme, payment system operators (PSO) – banks and non-banks – may offer digital payments offline, i.e., payments that do not require internet connectivity to take effect. The payment solutions provided to users shall be subject to the following terms and conditions :-
- Payments could be made using cards, wallets or mobile devices or through any other channel.
- Payments may be made in remote or proximity mode.
- Payment transactions can be offered without any Additional Factor of Authentication (AFA).
- The upper limit of a payment transaction shall be ₹ 200.
- The total limit for offline transactions on an instrument shall be ₹ 2,000, at any point of time. Resetting of the limit shall be allowed in online mode with AFA.
- The PSO shall send real time transaction alerts to users as soon as transaction details are received.
- Contactless payments shall adhere to EMV standards, as hitherto.
- Payment transactions in offline mode without AFA shall be at the choice of the user.
- The acquirer shall incur all liabilities arising out of technical or security issues at merchant’s end.
- These payments shall be covered by the provisions of the limited customer liability circular DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 06, 2017 and DPSS.CO.PD.No.1417/02.14.006/2018-19 dated January 04, 2019.
- Before introducing operations under the scheme, PSOs shall inform Reserve Bank the detailed specifications of the payment solutions they would offer. They may, however, launch operations without waiting for any approval from the Reserve Bank.
- Entities other than PSOs having innovative solutions may tie-up with PSOs to offer their products.
- Reserve Bank retains the right to advise a PSO to stop transactions and exit the pilot in the event of non-compliance of these conditions.
Special liquidity scheme for NBFCs/HFCs
1-Jul-2020: Special liquidity scheme for NBFCs/HFCs
The Government of India has approved a scheme to improve the liquidity position of NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks to the financial sector. To be eligible under the Scheme, the following conditions should be met:
- NBFCs including Microfinance Institutions that are registered with the RBI under the Reserve Bank of India Act, 1934, excluding those registered as Core Investment Companies;
- Housing Finance Companies that are registered under the National Housing Bank Act, 1987;
- CRAR/CAR of NBFCs/HFCs should not be below the regulatory minimum, i.e., 15% and 12% respectively as on March 31, 2019;
- The net non-performing assets should not be more than 6% as on March 31, 2019;
- They should have made net profit in at least one of the last two preceding financial years (i.e. 2017-18 and 2018-19);
- They should not have been reported under SMA-1 or SMA-2 category by any bank for their borrowings during last one year prior to August 01, 2018;
- They should be rated investment grade by a SEBI registered rating agency;
- They should comply with the requirement of the SPV for an appropriate level of collateral from the entity, which, however, would be optional and to be decided by the SPV.
As per the Government decision, SBICAP which is a subsidiary of the State Bank of India has set up a SPV (SLS Trust) to manage this operation. The SPV will purchase the short-term papers from eligible NBFCs/HFCs, who shall utilise the proceeds under this scheme solely for the purpose of extinguishing existing liabilities. The instruments will be CPs and NCDs with a residual maturity of not more than three months and rated as investment grade. The facility will not be available for any paper issued after September 30, 2020 and the SPV would cease to make fresh purchases after September 30, 2020 and would recover all dues by December 31, 2020; or as may be modified subsequently under the scheme.