MANU/EAFF/0058/2023

Ministry : Ministry of Finance

Department/Board : Economic Affairs

Notification No. : GSR559(E)

Date of Notification : 26.07.2023

Date of Publication : 26.07.2023

Guarantee Scheme for Corporate Debt (GSCD)

G.S.R. 559(E).--The Central Government has approved the 'Guarantee Scheme for Corporate Debt' (GSCD) for the purpose of providing guarantee cover against debt raised/ to be raised by Corporate Debt Market Development Fund (CDMDF).

1. Name of the Scheme/Fund

The Scheme shall be named as Guarantee Scheme for Corporate Debt (GSCD) and the Trust/ Fund to manage the scheme shall be named as Guarantee Fund for Corporate Debt (GFCD).

GFCD shall be a Trust Fund formed by Department of Economic Affairs (DEA), Ministry of Finance, Government of India and shall be managed by National Credit Guarantee Trustee Company Ltd. (NCGTC), a wholly owned company of the Department of Financial Services (DFS), Ministry of Finance, Government of India.

2. Purpose of the Scheme

To provide 100% guarantee cover against debt raised/to be raised by CDMDF, an Alternative Investment Fund (AIF) created/ to be created under relevant SEBI Regulations, for the purpose of investing in corporate debt securities at times of market dislocation with a view to stabilize the markets. The guarantee shall cover debt raised, along with interest accrued and other bank charges thereon, and shall not exceed Rs.30,000 crore. The framework for CDMDF has been detailed in Annexure.

3. Date of commencement

The scheme guidelines shall come into force from the date of issue of this Notification.

4. Duration of scheme

The Scheme would be initially for a period of 15 years from the initial closing date of CDMDF, extendable at the discretion of the DEA in consultation with SEBI.

5. Definitions

For the purposes of this Scheme -

(i) "Backstop Facility" refers to the institutional framework being created to enable purchase of investment grade debt securities, particularly during market dislocation.

(ii) "Corporate Debt Market Development Fund (CDMDF)" means an Alternative Investment Fund (AIF) created/ to be created under SEBI Regulations, for the purpose of investing in corporate debt securities at times of market dislocation with a view to stabilize the markets.

(iii) "Corpus of CDMDF" means total funds committed at CDMDF;

(iv) "Framework" means the framework of CDMDF

(v) "Investment Grade Debt Securities" means debt securities with minimum rating of ―BBB- (triple B minus)‖ or equivalent as assessed by a credit rating agency registered with SEBI at the time of making investments.

(vi) "Member Lending Institutions (MLIs)" means lending institutions including Scheduled Commercial Banks/ other financial intermediary approved by GFCD.

(vii) "Tenure of Guarantee Cover" means the maximum period of guarantee cover;

(viii) "Market Dislocation" refers to the stress in the financial sector of the economy and shall be decided by the SEBI Board as per the Framework.

6. Eligible Unitholders........