Credit Guarantee MCQ

Question 1

1. Under ECLGS 5.0, Rs. 5,000 crore of the additional credit-flow envelope was earmarked for airlines.
2. Under ECLGS 5.0, NCGTC provides default coverage under eligible additional credit facilities.
3. Under ECLGS 5.0, RBI is the institution named as the guarantee-cover provider.
Which of the statements given above are correct?

Accepted Answer

Statements 1 and 2 are correct as per the verified corpus fact bank. Statement 3 is false because the same corpus fact identifies NCGTC, and says RBI was not named as the guarantee-cover provider.

Question 2

Consider the following statements about CGTMSE cover tenure and claim settlement:
1. Where working capital facilities alone are covered, the coverage tenure is 5 years.
2. Penal interest and similar charges do not qualify for guarantee cover.
3. A guarantee can ordinarily be invoked only after the specified lock-in period of 18 months, with a 9-month exception for small short-tenure guarantees.
4. After the first claim instalment is settled, CGTMSE takes over recovery responsibility from the lender.
Which of the statements given above are correct?

Accepted Answer

Statements 1, 2 and 3 are correct. CGTMSE specifies a 5-year tenure for working-capital-only cover, excludes penal interest and similar charges, and allows invocation only after the applicable lock-in period. Statement 4 is false because the lender continues to remain responsible for recovery even after initial claim settlement.

Question 3

Consider the following statements about CGTMSE guarantee coverage categories:
1. For micro enterprises, the coverage shown for credit facilities up to Rs. 5 lakh is 85%.
2. Women entrepreneurs and MSEs promoted by Agniveers are shown with 90% coverage.
3. MSEs in RBI-identified credit-deficient districts get an additional 5 percentage points over the applicable coverage from 15 December 2023.
4. All other borrower categories are shown with 90% coverage.
Which of the statements given above are correct?

Accepted Answer

Statements 1, 2 and 3 are correct. CGTMSE lists 85% for micro enterprises in the up-to-Rs. 5 lakh slab, 90% for women entrepreneurs and MSEs promoted by Agniveers, and an additional 5 percentage points for MSEs in identified credit-deficient districts from 15 December 2023. Statement 4 is false because the page shows 75% for all other borrower categories, not 90%.

Question 4

Consider the following statements about ECLGS 3.0:
1. ECLGS 3.0 covered business enterprises in Hospitality, Travel & Tourism, Leisure and Sporting sectors.
2. It applied to borrowers with total credit outstanding not exceeding Rs. 50 crore as on 29 February 2020.
3. It allowed extension of credit up to 40% of total credit outstanding across lending institutions as on 29 February 2020.
4. The tenor of loans under ECLGS 3.0 was six years, including a moratorium period of two years.
Which of the statements given above are correct?

Accepted Answer

Statements 1, 3 and 4 are correct. ECLGS 3.0 covered specified service sectors, permitted credit up to 40% of total credit outstanding and had a six-year tenor with a two-year moratorium. Statement 2 is false because the outstanding-credit threshold was Rs. 500 crore, not Rs. 50 crore.

Question 5

1. NCGTC was incorporated under the Companies Act, 1956 on March 28, 2014.
2. NCGTC was established by the Department of Financial Services, Ministry of Finance, as a wholly owned Government of India company.
3. Credit-guarantee programmes are designed to share lenders' lending risk and facilitate access to finance for prospective borrowers.
Which of the statements given above are correct?

Accepted Answer

All three statements are correct. NCGTC's organisation page gives its incorporation date and ownership, and explains the risk-sharing purpose of credit-guarantee programmes.

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