Emergency Credit Line Guarantee Scheme (ECLGS) enhanced amidst second wave

On 30th May, 2021 the Government of India enhanced the benefit arising from the Emergency Credit Line Guarantee Scheme (ECLGS).

The scheme was launched in view of the COVID-19 crisis to provide 100% guarantee coverage to Banks and NBFCs to enable them to extend emergency credit facilities to Business Enterprises/ MSME’s in view of COVID-19 to meet their additional term loan/ additional working capital requirements.

ECLGS 4.0 refers to the scheme for providing 100% guarantee to member lending institutions in respect of eligible credit facility extended by them to its eligible hospitals/nursing homes/clinics/medical colleges for setting up of on-site oxygen producing plants.

(i) ECLGS 4.0:100% guarantee cover to loans up to Rs.2 crore to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants, interest rate capped at 7.5%;

(ii) 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;

(iii) Additional ECLGS assistance of upto 10% 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;

(iv) Current ceiling of Rs. 500 Cr. 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% or Rs.200 crore, whichever is lower.

(v) Civil Aviation sector to be eligible under ECLGS 3.

(vi) Validity of ECLGS extended to 30.09.2021 or till guarantees for an amount of Rs.3 lakh crore are issued.Disbursement under the scheme permitted up to31.12.2021.