31 May Emergency Credit Line Guarantee Scheme
(GS PAPER-3, GOVERNMENT SCHEME
Government has increased the scope of Emergency Credit Line Guarantee Scheme (ECLGS) for three more months overviewing the disruptions caused by second wave of COVID 19 pandemic. Extension will help businesses across several sectors of economy.
Key points of ECLGS 4.0:
- 100% guarantee cover to be provided on loans, in hospitals/nursing clinics/medical colleges/homes, up to Rs.2 crore. Loan can be utilized up to set up on-site oxygen generation plants. Interest rate on load was capped at 7.5%.
- Additional ECLGS assistance of up to 10% of outstanding by February 2020 to borrowers who are covered under ECLGS 1.0.
Ceiling of Rs. 500 Cr. of loan outstanding for eligibility under ECLGS 3.0 will be removed.
- It is subject to maximum additional ECLGS assistance provided to each borrower which is limited to 40% or Rs.200 crore, whichever is lower.
- Civil Aviation sector will be eligible under ECLGS 3.0
- Modifications in ECLGS will enhance utility and impact of ECLGS by providing additional support to MSMEs. It will safeguard livelihoods and help in resumption of business activity. It will facilitate flow of institutional credit at reasonable terms.