In a push to boost the economy amid the unprecedented second-wave of COVID-19 in the country, the Central Government on Sunday enlarged the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) to provide relief to small businesses, the aviation sector, and provide a concessional credit facility of up to Rs 2 crore in loans for health facilities to set up oxygen generation plants.
The official press release read, "On account of the disruptions caused by the second wave of COVID 19 pandemic to businesses across various sectors of the economy, Government has further enlarged the scope of Emergency Credit Line Guarantee Scheme."
As far as the aviation sector is concerned, Civil Aviation Minister Hardeep Singh Puri said that airlines, airports, air ambulances, and airports can avail additional funding facility under the ECLGS which will help alleviate their ”stressed cash flows”.
Under the ECLGS 4.0, it said, 100 percent guarantee cover will be given to loans up to Rs 2 crore 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 percent, which means the banks can offer loans less than this ceiling.
"Borrowers who are eligible for restructuring as per the RBI guidelines of May 5, 2021, and had availed loans under ECLGS 1.0 of overall tenure of four 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 five years for their ECLGS loan i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter," the ministry said.
Also, the new scheme has made a provision of additional ECLGS assistance of up to 10 percent of the outstanding as of February 29, 2020, to borrowers covered under ECLGS 1.0, in tandem with restructuring as per the RBI guidelines of May 5, 2021. The government has also removed the current ceiling of Rs 500 crore of loan outstanding for eligibility under ECLGS 3.0, subject to maximum additional ECLGS assistance to each borrower is limited to 40 percent or Rs 200 crore, whichever is lower.