The Government has enlarged the scope of ECLGS in order to support Covid-hit MSMEs further and business across various sectors of the economy.
The Finance Ministry 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 christened ECLGS 4.0.
The Ministry of Finance also announced a 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 the interest rate capped at 7.5 per cent.
The government extended the ECLGS validity to 30 September 2021 or until the guarantees for Rs.3 lakh crore are issued. The disbursement of the loans under the ECLGS is permitted up to 31 December 2021.
The ministry also announced the 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. Additional assistance of up to 10 per cent of the outstanding credit as of February 29, 2020, has been offered to borrowers covered under ECLGS 1.0 in line with restructuring as per RBI guidelines. The borrowers who had availed loans under the ECLGS 1.0 having overall tenure of four years consisting of repayment of the only interest during the first 12 months and repayment of principal and interest in 36 months can now avail a tenure of five years, that is, repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter.
The government has also removed the current limit of Rs 500 crore loans outstanding for eligibility under ECLGS 3.0 subject to maximum additional ECLGS assistance to each borrower being limited to 40 per cent or Rs 200 crore, whichever is lower. The Ministry also extended the scope of ECLGS 3.0 to cover the Civil Aviation sector.
Detailed operational guidelines in this regard are being separately issued by the National Credit Guarantee Trustee Company (NCGTC).