Home / Economy / Govt modifies ECLGS to provide collateral-free liquidity for civil aviation industry

NEW DELHI: The government has modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund based or non-fund based loan outstanding or 1,500 crore, whichever is lower, and of the above 500 crore shall be considered, based on equity contribution by the owners.

All other criteria terms and conditions parameters prescribed under the operational guidelines of the ECLGS on 30 August 2022, shall be applicable as it is, the finance ministry said in a statement.

The modifications, introduced by Department of Financial Services, are aimed to give necessary collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems, it said.

In March, the Emergency Credit Line Guarantee Scheme (ECLGS) was extended till March 2023, to implement the announcement made in the Union Budget 2022-23.

Keeping in view the high proportion of non-fund based credit in the overall credit of the civil aviation sector, the eligible borrowers were permitted to avail up to 50% of their highest total fund and non-fund based credit outstanding, subject to a maximum of 400 crore per borrower.

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