Covid-19: Centre expands Emergency Credit Line Guarantee Scheme amid second wave | Business

May 30, 2021, 03:58PM ISTSource:

The Ministry of Finance on Sunday further expanded the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) amid the economic disruption caused by the second wave of the Covid-19 pandemic. According to an official statement by the Ministry, under the ECLGS 4.0, 100 per cent 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 per cent for the same. “Borrowers who are eligible for restructuring as per Reserve Bank of India (RBI) guidelines of May 5 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 statement read. The ministry said that additional ECLGS assistance of up to 10 per cent of the outstanding as of February 29 to borrowers covered under ECLGS 1.0, in tandem with restructuring as per RBI guidelines of May 5. “Current ceiling of Rs 500 crore of 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,” it said. Furthermore, the validity of ECLGS extended to September 30 or till guarantees for an amount of Rs 3 lakh crore has been issued and disbursement under the scheme is permitted up to December 31.

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