Keeping in mind the disruption caused by the second wave of COVID-19, the government has extended the scope of the Emergency Credit Line Guarantee Scheme (ECLGS). Announcing ECLGS 4.0 on Sunday, the Finance Ministry said that the current ceiling of Rs 500 crore of loan outstanding for eligibility under ECLGS 3.0 will be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40 per cent or Rs 200 crore, whichever is lower. The move is expected to bring in more small businesses under its ambit.
Commenting on the set of announcements, Uday Shankar, President, FICCI said, “We welcome the steps taken by the banking fraternity to support industry, particularly the MSME sector, during this hour of crisis.”
He added, “Relaxations announced under ECLGS 1.0 both in terms of extension of period of repayment as well as offer of an additional 10 per cent loan will serve the MSMEs well. Removal of the Rs 500 crore cap for eligibility under ECLGS 3.0 and inclusion of the civil aviation sector are also welcome.”
Under the latest ECLGS 4.0, full guarantee cover to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants is offered. The interest rate for the same is capped at 7.5 per cent. “The new scheme ECLGS 4.0 provides financial support to the critical healthcare sector, and we hope that the banks will go all out in disbursing the loans in a quick and timely manner. We need to ramp up the health infrastructure in the country over the next few months to prepare ourselves well for any future waves,” added Shankar.
“Finally, while the ECLGS Scheme has been extended till September 2021 with disbursements being allowed till December 2021, it would have further helped if a higher allocation would have also been made under this scheme.”