Govt modifies partial credit guarantee scheme 2.0, extends it by three months
- Partial Credit Guarantee Scheme (PCGS) 2.0 was launched by Central Government on May 20, 2020.
- Purpose of Partial Credit Guarantee Scheme (PCGS) 2.0:to provide Portfolio Guarantee for purchase of Bonds or Commercial Papers (CPs) with a rating of AA and below issued by NBFCs/HFCs/ MFIs by Public Sector Banks (PSBs).
- The Government has now modified PCGS 2.0 for purchase of Bonds/CPs as under:
- Additional 3 months have been granted to build up the portfolio. Till 19.11.2020.
- At the portfolio level, AA and AA- investment sub-portfolio under the Scheme should not exceed 50% (instead of 25% stipulated earlier) of the total portfolio of Bonds/ CPs purchased by PSBs under the Scheme.
- This has been done due to the fact that the stipulated limit for AA/AA- rated Bonds/CPs has been nearly reached while the appetite for lower-rated Bonds/CPs is nearing saturation considering their lower ticket size.
Points to remember:
- Under the Partial Credit Guarantee Scheme (PCGS) 2.0 what is the limit for AA and AA- investment sub-portfolio at the portfolio level?- 50%.
- What is the time limit granted under the Partial Credit Guarantee Scheme (PCGS) 2.0 to build up the portfolio?- 19.11.2020.
Source: PIB