PremiumNEW DELHI: The finance ministry on Thursday extended the emergency credit line guarantee scheme (ECLGS) to sectors hit by the coronavirus pandemic, and widened the first phase of the scheme to include more businesses to avail government guaranteed loans.
The ECLGS 2.0 scheme will provide funding to 26 stressed sectors identified by the Reserve Bank of India (RBI) appointed KV Kamath committee and the healthcare sector with outstanding credit above ₹50 crore and not exceeding ₹500 crore as on 29 February 29, 2020. Outstanding credit of such borrowers should not due over 30 days as on February 29.
The announcement was made by finance minister Nirmala Sitharaman on 12 November, as a part of the economic stimulus—Aatmanirbhar Bharat 3.0.
Borrowers eligible under the scheme will get additional funding up to 20% of their total outstanding credit as a collateral free credit fully guaranteed by National Credit Guarantee Trustee Company Ltd. The loan will have a tenor of 5 years, with a 12-month moratorium on repayment of principal.
In cases where no annual turnover ceiling is prescribed, the government has extended ECLGS 1.0 to entities with total credit outstanding up to ₹50 crore as on February 29, but was previously ineligible owing to their annual turnover exceeding Rs.250 crore, according to a finance ministry statement.
The credit guarantee scheme is available for borrowers till March 31, 2021 or until guarantees of ₹3 trillion are sanctioned under the scheme--including ECLGS 1.0 and 2.0--whichever is earlier.
The scheme “will go a long way in contributing to economic revival, protecting jobs, and create conducive environment for employment generation," the statement said.
