The Union Finance Ministry has expanded the scope of the Rs 3000 billion Emergency Credit Line Guarantee Scheme (ECLGS), to now offer concessional loans to hospitals for setting up on-site oxygen generation plants among other things. The validity of the scheme has been extended by 3 months to 30 September and or till guarantees for an amount of Rs 3000 billion are issued. The last date of disbursement under the scheme has been extended to 31 December 2021. The ministry said on account of the disruptions caused by the second wave of covid pandemic to businesses across various sectors of the economy, the government has further enlarged the scope of ECLGS. Banks together have sanctioned Rs 2540 billion so far and another Rs 450 billion room is available under the ECLGS. Loans worth Rs2400 billion have already been disbursed to eligible MSMEs and businesses. Under the ECLGS 4.0, 100% guarantee cover will be given to loans up to Rs 20 million to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants. The interest rate on these loans has been capped at 7.5%. The ECLGS 3.0 cover business enterprises in hospitality, travel & tourism, leisure & sporting sectors, which had as of February 2020, total credit outstanding not exceeding Rs 500 crore.
The highlights of the new order are:
(i) Under ECLGS 4.0, 100% guarantee cover will be provided to loans up to Rs20 million to hospitals/ nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants, interest rate capped at 7.5%;
(ii) Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 2021 and had availed loans under ECLGS 1.0 of overall tenure of 4 years
comprising of repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter, will now be able to avail a tenure
of 5 years;
(iii) Additional ECLGS assistance of up to 10% of the outstanding as on 29 February 2020 is offered to borrowers covered under ECLGS 1.0;
(iv) Current ceiling of Rs5 billion loan outstanding for eligibility under ECLGS 3.0 is removed, subject to certain conditions;
(v) Civil Aviation sector is now eligible under ECLGS 3.0.
(vi) Validity of ECLGS is extended to 30 September 2021 or till guarantees for an amount of Rs3 trillion are issued.