Guidelines for 10% additional credit under ECLGS issued but MSMEs allege reluctance by Banks
New Delhi, Oct 11 (KNN) Following the announcement on 29th Sept 2021 by the Central Government about extension of Emergency Credit Line Guarantee Scheme (ECLGS) till 31st March 2021, the National Credit Guarantee Trustee Company Ltd (NCGTC) has issued the detailed guidelines on the subject.
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.
The modification was introduced to ensure that businesses adversely impacted by the second wave of COVID 2019 get enhanced collateral free liquidity especially to take advantage of the festival season.
While MSME sector has been demanding the continuance, Banks seems a tad apathetic.
“When I approached HDFC Bank where I have current account, the branch feigned ignorance about extension of ECLGS scheme or about 10% additional funds that could be availed,” informed Naveen Jain of Dayachand Engineering Industries (P) Ltd based in Muzaffar Nagar, Uttar Pradesh.
“Bank flatly refused to entertain my application,” he added.
Several such complaints have reached the national MSME body- Federation of Indian Micro and Small & Medium Enterprises (FISME).
“It is almost 10 days since the new guidelines were issued therefore it is difficult to accept that Bank branches are not aware. FISME will take up the issue with Government and RBI if the situation doesn’t improve in couple of days,” says Anil Bhardwaj, FISME Secretary General.
The NCGTC Guidelines on ECLGS can bed browsed at https://www.eclgs.com/documents/ECLGS%20-%20Operational%20Guidelines-Updated%20as%20on%2001.10.2021.pdf
The ECLGS has proved to be a successful scheme with number of MSME beneficiaries crossing 1.15 crore. As on 24th September 2021, loans sanctioned have crossed INR 2.86 lakh crore under the Scheme.