ECLGS 4.0: Govt extends emergency credit scheme for MSMEs; increases ECLGS 1.0 tenor to 5 years

Further ECLGS help of as much as 10 per cent has been provided of the excellent credit score as of February 29, 2020 to debtors lined underneath ECLGS 1.0.

With the intention to help Covid-hit MSMEs additional, the federal government on Sunday introduced a three-month extension of its Rs 3 lakh crore Emergency Credit score Line Assure Scheme (ECLGS) to September 30, 2021, from June 30, 2021, or until ensures for an quantity of Rs 3 lakh crore are issued underneath the fourth revision of the scheme dubbed ECLGS 4.0. The Ministry of Finance additionally introduced 100 per cent assure cowl to loans as much as Rs 2 crore to hospitals, nursing properties, clinics, medical faculties for establishing on-site oxygen era crops with rate of interest capped at 7.5 per cent.

The ministry additionally introduced extension of the tenor of the scheme for MSMEs and different entities which might be eligible for restructuring as per the Reserve Financial institution of India (RBI) pointers as of Could 5, 2021 and had borrowed credit score underneath ECLGS 1.0. From total tenure of 4 years comprising of compensation of curiosity solely in the course of the first 12 months with compensation of principal and curiosity in 36 months underneath ECLGS 1.0 will now have the ability to avail for a tenor of 5 years for his or her ECLGS mortgage, that’s, compensation of curiosity just for the primary 24 months with compensation of principal and curiosity in 36 months thereafter.

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Furthermore, further ECLGS help of as much as 10 per cent has been provided of the excellent credit score as of February 29, 2020 to debtors lined underneath ECLGS 1.0 in step with restructuring as per RBI pointers. The federal government has additionally eliminated the present restrict of Rs 500 crore mortgage excellent for eligibility underneath ECLGS 3.0 to be eliminated topic to most further ECLGS help to every borrower being restricted to 40 per cent or Rs 200 crore, whichever is decrease, the ministry stated on Sunday. The Ministry additionally prolonged the scope of ECLGS 3.0 to cowl the Civil Aviation sector.