The World Bank has approved a $500 million program to support the Government of India’s initiative to help the MSME sector. On May 30, the government had announced to extend its Emergency Credit Line Guarantee Scheme (ECLGS) of Rs 3 lakh crore by three months. This scheme has been extended from 30 June 2021 to 30 September 2021 or till an amount of Rs 3 lakh crore is released. The Finance Ministry had also announced 100% guarantee on loans up to Rs 2 crore for hospitals, nursing homes, clinics, medical colleges to set up on-site oxygen plants, with an interest rate cap of 7.5 per cent.
The period of ECLGS 1.0 was also extended
The ministry had also announced extension of the scheme period for MSMEs and other units, which are eligible for restructuring and have taken credit under ECLGS 1.0, as per the guidelines dated May 5, 2021. 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
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Earlier on Friday, RBI also increased the loan restructuring limit for MSMEs going through crisis from Rs 25 crore to Rs 50 crore. RBI had said that this will provide relief to MSME and non-MSME small businesses and individual customers with loans for business. Under restructuring, banks change the existing loan terms for the convenience of the customers. In this way, more time is given to repay the loan. Along with this, the frequency of interest liability is also changed under the prescribed conditions.
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