The Indian Banks’ Association (IBA) has suggested that the government extend the validity of its Rs 4.5-lakh-crore guaranteed loan scheme for companies and individuals preferably by one year through March 2023.It has also pitched for providing an additional dose of 10% of the eligible finance for all eligible borrowers, who continue to be affected by the Covid-induced extended disruptions, under the existing Emergency Credit Line Guarantee Scheme (ECLGS).
In September 2021, the government had extended the validity of the scheme by six months through March 2022, or until the limit is used up, whichever is earlier.In a letter to the department of financial services secretary Debasish Panda on January 15, IBA chief executive Sunil Mehta said, given the spread of the latest Covid variant, MSMEs are yet to recover from stress.
So, government support through the ECLGS needs to continue “till the economy regains its strength”.“This will help banks continue their support to the sectors affected severely by the pandemic and ensure availability of life saving liquidity support to the affected MSMEs,” Mehta wrote.
“With the current variant of the virus being less life threatening, we hope that it will gradually wane away and the economic revival, which has begun already, will establish firmly resulting in copious cash flows to sustain the operations of MSMEs and to take care of their repayment obligations,” he added.
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