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Govt Extends Emergency Credit Line Guarantee Scheme Till Sep 30
In a related development, SBI, IBA held a press conference to explain the approach for restructuring loans
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On May 30 the Finance Ministry 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. Effectively this means that the government has expanded the scope of the Rs 3 lakh crore ECLGS to cover loans up to Rs 2 crore for setting up on-site oxygen generation plants at healthcare facilities.
In a statement issued by the Finance Ministry on May 30, as part of the ‘ECLGS 4.0’, a 100 percent guarantee cover will be extended to loans of up to Rs 2 crore granted to clinics, hospitals, nursing homes, and medical colleges for setting up on-site oxygen generation plants. "The interest rate has been capped at 7.5 percent for the same," the statement said.
“Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 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 i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter,” the finance ministry statement said.
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 is limited to 40 percent or Rs 200 crore (whichever is lower), the finance ministry added.
The Finance Ministry also clarified that now the civil aviation sector was made eligible under 'ECLGS 3.0'.
"The latest modifications to ECLGS would enhance its utility and impact by providing additional support to MSMEs, safeguarding livelihoods, and helping in the seamless resumption of business activity. These changes will further facilitate the flow of institutional credit at reasonable terms,” it added.
Meanwhile, in Mumbai State Bank of India (SBI) Chairman Dinesh Khara along with Indian Banks Association (IBA) Chairman Rajkiran Rai made a number of announcements on May 30 including extending the validity of ECLGS have been extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued.
On how can customers approach banks for resolution? IBA said the customers can file an application on the portal at the bank's website. "Customers can do manual submission of application at the branch processing of application and implementation in the system," it was explained.