Lending institutions under the Emergency Credit Line Guarantee Scheme (ECLGS), which was approved by the government in May last year, have disbursed Rs 2.54 lakh crore so far to MSMEs and other eligible businesses of the Rs-3-lakh-crore ceiling. This is up 53 per cent from the previously disclosed amount of Rs 1,65,886 crore as of January 8, 2021, by the Finance Ministry. “Rs 2.54 lakh crore has been covered. Still, there is a window available of roughly Rs 45,000 crore that depends on how long it will take. As per the NCGTC estimates, these schemes may be able to exhaust that available window,” Sunil Mehta, Chief Executive Officer, Indian Banks’ Association (IBA) told reporters on Sunday in a virtual press conference — on the extension of the ECLGS scheme — in the presence of IBA Chairman Rajkiran Rai and State Bank of India Chairman Dinesh Khara.
The Ministry of Finance on Sunday had announced another three-month extension of the emergency credit scheme from June 2021 to September 2021 for MSMEs and individual businesses impacted due to the Covid pandemic. ECLGS was originally envisaged till October last year but was later extended till November followed by another extension till March 2021 and further till June 2021 as guarantees worth the entire Rs 3 lakh crore amount couldn’t be issued. Around 12 public sector banks, 23 private sector banks, and 31 non-banking financial companies (NBFCs) had sanctioned loan amount of Rs 2,14,083 crore to 90,57,300 borrowers out of which Rs 1,65,886 crore was disbursed to 42,46,831 borrowers as of January 8, 2021, according to the earlier data from the Finance Ministry.
With the new extension, banks are expected to create a Covid loan book, under the guidelines from the Reserve Bank of India, and accordingly would offer healthcare business loans to entities for setting up oxygen plants under ECGLS 4.0, SBI and IBA said in a presentation. Loans up to Rs 2 crores capped at 7.5 per cent interest will be provided to hospitals and nursing homes for setting up oxygen plants and will be backed by 100 per cent guarantee cover of NCGTC under ECLGS 4.0. Also, business loans for healthcare facilities up to Rs 100 crores will be provided by banks to set up or expand healthcare infrastructure and to manufacturers of healthcare products. Moreover, unsecured personal Loans to individuals from Rs 25,000 to Rs 5 lakhs will be provided to salaried, non-salaried, and pensioners for meeting Covid treatment.
MSMEs eligible for restructuring as per RBI guidelines of May 5, 2021, and which had availed loans under ECLGS 1.0 with the overall period of four years (including interest repayment only during the first 12 months and repayment of principal and interest in 36 months) will now be able to avail a tenor of five years. This means the period of repayment of interest would be now 24 months. The government had also announced an additional 10 per cent assistance of the outstanding credit as of February 29, 2020 for MSME borrowers who have availed ECLGS 1.0 and are also eligible for restructuring as per RBI guidelines.
The Finance Ministry also removed the ceiling of Rs 500 crore of loan outstanding under ECLGS 3.0 subject to a maximum additional ECLGS assistance to each borrower being limited to 40 per cent or Rs 200 crore, whichever is lower. Moreover, it also included the Civil Aviation sector in ECLGS 3.0.