Government extended the duration of Emergency Credit Scheme to give relief to MSME, ECLGS 1.0 also increased to 5 years

The government has announced to extend the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for three months.

To further support the Corona-hit MSME, the government on Sunday announced a three-month extension of its Rs 3 lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS). This scheme has been extended from 30 June 2021 to 30 September 2021 or until an amount of Rs 3 lakh crore is released. The Finance Ministry also announced a 100 per cent guarantee on loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges to set up an on-site oxygen plant, with an interest rate limit of 7.5 per cent.

The ministry also announced an extension of the scheme period for MSMEs and other units which, according to the Guidelines dated 5 May 2021, are eligible for reorganization and have borrowed credits under ECLGS 1.0. Total tenor of four years under ECLGS 1.0, which includes repayment of interest in the first 12 months, with which, repayment of principal and interest in 36 months under ECLGS 1.0, can avail a tenure of five years for their ECLGS loan Can take Which is the repayment of principal and interest in the subsequent 36 months along with repayment of interest only for the first 24 months.

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Civil aviation sector included in ECLGS 3.0

In addition, according to the RBI guidelines under ECLGS 1.0, additional ECLGS assistance up to 10 per cent of the outstanding credit amount existing on 29 February 2020 has been offered to the borrowers with restructuring. The ministry said on Sunday that the government has removed the eligibility for loan arrears of Rs 500 crore under ECLGS 3.0. In this, the limit of additional ECLGS assistance to each borrower is 40 per cent or Rs 200 crore, whichever is less. The ministry has extended the area of ​​ECLGS 3.0 to cover the civil aviation sector.