Emergency credit line guarantee scheme modified and extended – Know Full details
Emergency credit line guarantee scheme– Ministry of Finance vide press release 1759251 dated 29th September, 2021 has extended the scope of ECLGS’ and scheme extended till 31.03.2022 or till guarantees for an amount of Rs. 4.5 lakh crore are issued under the scheme, whichever is earlier. Further, the last date of disbursement under the scheme has also been extended to 30.06.2022 to support various businesses impacted by the second wave of COVID 19 pandemic.
EMERGENCYCREDIT LINE GUARANTEESCHEME(ECLGS) launched by Government of India as a special scheme in view of COVID-19 crisis to provide 100% guarantee coverage to Banks and NBFCs to enable them to extend emergency credit facilities toBusiness Enterprises / MSMEs in view of COVID-19 to meet their additional term loan/additional working capitalrequirements.
List of modifications have been made in the scheme to enable support to businesses impacted by the second wave of COVID:
- Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of upto 10% of total credit outstanding as on 29.02.2020 or 31.03.2021, whichever is higher.
- Businesses who have not availed assistance under ECLGS (ECLGS 1.0 or 2.0), can avail credit support of upto 30% of their credit outstanding as on 31.03.2021.
- Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40% of their credit outstanding as on 31.03.2021, to the maximum of Rs.200 crore per borrower;
- Incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of change in cut-off date to 31.03.2021 from 29.02.2020.
- Accordingly, Borrowers who have availed assistance under ECLGS and whose credit outstanding as on 31.03.2021 (excluding support under ECLGS) is higher than that on 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0 or 3.0.
Source: Release ID: 1759251
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The author of the above article is CS Lalit Rajput, Partner at Xcede Consultech LLP.
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