Emergency Credit Line Guarantee Scheme extended till June 30; travel, tourism sectors added
New Delhi, Apr 1 (KNN) The government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) till June 30 and also expanded its scope to cover enterprises in hospitality, travel and tourism, leisure and sporting sectors.
ECLGS 3.0 will involve extension of credit of up to 40 per cent of total credit outstanding across all lending institutions as on February 29, 2020. The tenor of loans granted under the scheme will be for 6 years, including a moratorium period of 2 years.
"In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the government has now extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS) through introduction of ECLGS 3.0 to cover business enterprises in hospitality, travel & tourism, leisure & sporting sectors which had, as on 29.02.2020, total credit outstanding not exceeding Rs 500 crore and overdues, if any, were for 60 days or less, on that date i.e. 29th Feb 2020," the Finance Ministry said in a statement on Wednesday.
The modifications introduced in the scheme, while providing an incentive to lending institutions to enable availability of additional funding facilities to the eligible beneficiaries will go a long way in contributing to economic revival, protecting jobs, and creating a conducive environment for employment generation, it added.
"Further, the validity of ECLGS i.e. ECLGS 1.0, ECLGS 2.0 & ECLGS 3.0 have been extended upto 30.06.2021 or till guarantees for an amount of Rs 3 lakh crore are issued. Last date of disbursement under the scheme has been extended to 30.09.2021," the release said.
On May 20, 2020 the Cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency borrowers in the form of a guaranteed emergency credit line (GECL)facility.
For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years.
The scheme is applicable to all loans sanctioned under the GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
All MSME borrower accounts with an outstanding credit of up to Rs 50 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 250 crore, are eligible for GECL funding under the scheme.
The scheme was expanded to cover 26 distressed sectors through ECLGS 2.0 and was extended till March 31, 2021.
''The revised operational guidelines for ECLGS 3.0 will be issued by the National Credit Guarantee Trustee Company Ltd,'' the government said.