Page 37 - BF Cover January 2021.cdr

ARTICLE

Illustration under the cash-back and interest subsidy under the scheme for a loan amounting to
Rs 10000.00

Month Principal Interest @24% EMI (Rs.) Interest subsidy Cash Back Incentive Total benefit
(Rs.) (Rs.) (7%) (Rs.) (Rs.) (Rs.)
(A) (B) (C) (D) (E) (D+E)
1 746.00 200.00 946.00 58.00 100.00 158.00
2 761.00 185.00 946.00 54.00 100.00 154.00
3 776.00 170.00 946.00 50.00 100.00 150.00
4 791.00 154.00 946.00 46.00 100.00 146.00
5 807.00 139.00 946.00 42.00 100.00 142.00
6 823.00 122.00 946.00 36.00 100.00 136.00
7 840.00 106.00 946.00 32.00 100.00 132.00
8 856.00 89.00 946.00 27.00 100.00 127.00
9 874.00 72.00 946.00 22.00 100.00 122.00
10 891.00 55.00 946.00 17.00 100.00 117.00
11 909.00 37.00 946.00 12.00 100.00 112.00
12 927.00 19.00 946.00 6.00 100.00 106.00
Total 10,001.00 1348.00 11349.00 402.00 1200.00 1602.00
% w.r.t. 100% 30% of interest 88% of interest 118%
interest

Inference: "Maximum Cashback amount and interest subsidy amount would sum up to Rs. 1600.00 (Rs 1200.00 cash back
and Rs 400.00 as interest subsidy), which is 118% of the total interest of Rs 1348.00 on a loan of Rs 10000.00 with an
interest rate of 24%"

Eligible lenders Note:
Y Maximum Guarantee coverage will be 15% of the year
Y Scheduled Commercial Banks
portfolio.
Y Regional Rural Banks (RRBs) Y The periodicity of filing of claims by lending institutions
Y Small Finance Banks (SFBs) will be quarterly.
Y This guarantee cover will be without any charges.
Y Cooperative Banks
Y Non-Banking Finance Companies (NBFCs) Integrated IT application for scheme Administration
Y An Integrated IT platform along with Mobile App will
Y Micro Finance Institutions (MFIs)
be developed by the Ministry for administration of the
Y SHG Banks established in some States/UTs e.g. Stree scheme.
Nidhi etc. Y This portal will provide one stop solution for
administration of the scheme
Credit Guarantee
Y The IT platform will be integrated with the vendors
Y The scheme has a provision of Graded Guarantee Cover data bases across the states/UTs, BCs / Constituents/
for loans sanctioned agents of lending institutions, digital payment
Y It is administered by Credit Guarantee Fund Trust for aggregators and PAiSA portal of MoHUA and Udyami
Micro and small Enterprises (CGTMSE), which will be Mitra portal managed by Small Industries Development
operated on portfolio basis Bank of India (SIDBI)
Default First Loss default (Up to 5%) Second Loss (beyond 5% up to 15%)
Guarantee coverage 100% 75% of default portfolio

BANKING FINANCE | JANUARY | 2021 | 37