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ECLGS scope expanded, norms eased to support MSMEs
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SME Times News Bureau | 31 May, 2021
The Centre has modified the Emergency Credit Line Guarantee Scheme
(ECLGS) to bring the civil aviation sector under the ambit of the
scheme.
Announcing ECLGS 4.0 on Sunday, the Finance Ministry also
said that 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 per
cent or Rs 200 crore, whichever is lower.
The move would bring in more small businesses under its ambit.
An
official statement said: "The modifications in ECLGS, would enhance the
utility and impact of ECLGS 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."
Further, as the country faced a
severe shortage of medical oxygen amid the second wave of Covid-19, the
Centre has decided to offer 100 guarantee cover to loans up to Rs 2
crore to hospitals, nursing homes, clinics and medical colleges for
setting up on-site oxygen generation plants.
The interest rate for such loans has been capped at 7.5 per cent.
The
statement further said that borrowers who are eligible for
restructuring as per RBI guidelines of May 5, 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.
The government has also
announced additional ECLGS assistance of up to 10 per cent of the
outstanding as on February 29, 2020 to borrowers covered under ECLGS
1.0, in tandem with restructuring as per RBI guidelines of May 05, 2021.
Validity of ECLGS has been extended to September 30, 2021 or till guarantees for an amount of Rs 3 lakh crore are issued.
The Centre has permitted disbursement under the scheme up to December 31, 2021.
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