Validity of ECLGS was extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued
The Centre on May 30 further expanded the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) amid the economic disruption caused by the second wave of COVID-19 pandemic.
Under ‘ECLGS 4.0’, 100 percent guarantee cover will be extended to loans of up to Rs 2 crore given to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants. The interest rate has been capped at 7.5 percent for the same, the finance ministry said in a statement.
“Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 2021 and had availed loans under ‘ECLGS 1.0’ of overall tenure of four years comprising of repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter, will now be able to avail a tenure of five years for their ECLGS loan i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter,” the finance ministry said.
The current ceiling of Rs 500 crore of loan outstanding for eligibility under ‘ECLGS 3.0’ will be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40 percent or Rs 200 crore (whichever is lower), the finance ministry added.
Read: Explained | All you need know about the Emergency Credit Line Guarantee Scheme
Further, the validity of ECLGS was extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued. Disbursement under the scheme was permitted up to December 31, 2021.
Additionally, the civil aviation sector was made eligible under ‘ECLGS 3.0’.
The ministry said that the latest modifications to ECLGS would enhance its utility and impact by providing additional support to MSMEs, safeguarding livelihoods and helping in seamless resumption of business activity. “These changes will further facilitate flow of institutional credit at reasonable terms.”
In late April, the Retailers Association of India (RAI) had also asked Finance Minister Nirmala Sitharaman to extend ECLG benefits to retailers.
Follow Moneycontrol’s full coverage of the coronavirus pandemic here