In order to support Covid-hit MSMEs further, the government on Sunday announced a three-month extension of its Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to September 30, 2021, from June 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued under the fourth revision of the scheme dubbed ECLGS 4.0. The Ministry of Finance also announced 100 per cent guarantee cover to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants with interest rate capped at 7.5 per cent.
The ministry also announced extension of the tenor of the scheme for MSMEs and other entities that are eligible for restructuring as per the Reserve Bank of India (RBI) guidelines as of May 5, 2021 and had borrowed credit under ECLGS 1.0. From 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 under ECLGS 1.0 will now be able to avail for a tenor of five years for their ECLGS loan, that is, repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter.
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Moreover, additional ECLGS assistance of up to 10 per cent has been offered of the outstanding credit as of February 29, 2020 to borrowers covered under ECLGS 1.0 in line with restructuring as per RBI guidelines. The government has also removed the current limit of Rs 500 crore loan outstanding for eligibility under ECLGS 3.0 to be removed subject to maximum additional ECLGS assistance to each borrower being limited to 40 per cent or Rs 200 crore, whichever is lower, the ministry said on Sunday. The Ministry also extended the scope of ECLGS 3.0 to cover the Civil Aviation sector.