Govt Extends Validity of ECLGS For MSMEs Till September, Details Here
In response to the economic inconvenience caused by the second wave of the COVID-19 epidemic, the Union Finance Ministry extended the validity of the Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs on Sunday. According to the government's press release "The modifications in ECLGS, would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in a seamless resumption of business activity. These changes will further facilitate the flow of institutional credit at reasonable terms." According to a press statement from the Ministry of Finance "On account of the disruptions caused by the second wave of COVID-19 pandemic to businesses across various sectors of the economy, Government has further enlarged the scope of Emergency Credit Line Guarantee Scheme as under:"
1) The ECLGS 4.0 provides a 100 per cent guarantee on loans up to Rs.2 crore to hospitals, nursing homes, clinics, and medical institutions for the installation of on-site oxygen generation plants, with an interest rate maximum of 7.5 per cent.
2) Borrowers who are qualified for restructuring under RBI guidelines issued on May 5, 2021, and who took out loans under ECLGS 1.0 with an overall tenure of four years and repayment of interest only for the first 12 months followed by repayment of principal and interest for the next 36 months will now be able to take out loans under ECLGS 2.0 with an overall tenure of five years, i.e. repayment of interest only for the first 12 months followed by repayment of principal and interest for the next 36 months will now be able to take out.
3) The government has also stated that borrowers covered under ECLGS 1.0 would get additional ECLGS support of up to 10% of the outstanding as of February 29, 2020, in accordance with restructuring as per RBI regulations dated May 5, 2021.
4) The current eligibility ceiling of Rs. 500 crore for ECLGS 3.0 would be eliminated, with the maximum additional ECLGS assistance to any borrower being restricted to 40% or Rs.200 crore, whichever is lower.
5)The civil aviation sector has been included in ECLGS 3.0 since it has been the most affected by travel restrictions due to COVID-19.
6) The validity of the ECLGS has also been extended till September 30, 2021, or until guarantees in the amount of Rs.3 lakh crore are provided. The scheme allows for disbursement until December 31, 2021.
The Ministry of Finance has also declared on its Twitter account that "On account of the disruptions caused by the second wave of COVID-19 pandemic to businesses across various sectors of the economy, Govt has further enlarged the scope of Emergency Credit Line Guarantee Scheme."
✅Emergency Credit Line Guarantee Scheme (ECLGS) expanded— Ministry of Finance (@FinMinIndia) May 30, 2021
✅ECLGS 4.0 for onsite oxygen generation
✅wider coverage of ECLGS 3.0
✅Increase in tenor for ECLGS 1.0
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