To assist companies affected by the second wave of the Covid-19 epidemic, the government has extended the Emergency Credit Line Guarantee Scheme (ECLGS).
The programme eliminates the Rs 500 crore cap on outstanding loans while maintaining the government’s Rs 3 trillion guarantee protection. Borrowers would be able to get up to 40% or Rs 200 crore in assistance, whichever is less.
Borrowers covered by ECLGS 1.0 will receive further assistance of up to 10% of the outstanding amount as of February 29, 2020, in accordance with RBI guidelines of May 5, 2021. Borrowers can borrow up to 20% of their total outstanding credit up to Rs 25 crore under ECLGS 1.0 as of February 29, 2020. As a result, such debtors will now get a total of 30% of their outstanding debt.
The project, known as ECLGS 4.0, has been expanded to include on-site oxygen generating units for hospitals and nursing homes/clinics, reformed MSME accounts, and the civil aviation industry, among other things. The scheme’s validity has been extended till September 30. Disbursements can be made till the end of the year. Hospitals building up oxygen generating units are being offered a guarantee cover for loans up to Rs two crore, with the interest rate restricted at 7.5 percent.
According to Reserve Bank of India standards, the programme would assist debtors who are qualified for restructuring. It applies to enterprises that took out loans under ECLGS 1.0 with a four-year term that included interest repayment for the first 12 months and principle and interest payments for the next 36 months. These borrowers will now be able to repay the loan over a 5-year period, with interest repayment for the first 24 months and principle and interest payments for the next 36 months. ECLGS 2.0 and ECLGS 3.0 had loan terms of five years with a 12-month moratorium on debt payments and six years with a two-year moratorium, respectively.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.
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