Lending institutions below the Emergency Credit Line Guarantee Scheme (ECLGS), which was authorized by the government in May last year, have disbursed Rs 2.54 lakh crore so far to MSMEs and other eligible firms of the Rs-3-lakh-crore ceiling. This is up 53 per cent from the previously disclosed quantity 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 a further 3-month extension of the emergency credit scheme from June 2021 to September 2021 for MSMEs and person firms impacted due to the Covid pandemic. ECLGS was initially envisaged till October last year but was later extended till November followed by a further extension till March 2021 and additional till June 2021 as guarantees worth the complete Rs 3 lakh crore quantity couldn’t be issued. Around 12 public sector banks, 23 private sector banks, and 31 non-banking economic firms (NBFCs) had sanctioned loan quantity 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 information from the Finance Ministry.
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With the new extension, banks are anticipated to develop a Covid loan book, below the suggestions from the Reserve Bank of India, and accordingly would offer you healthcare organization loans to entities for setting up oxygen plants below ECGLS 4., SBI and IBA mentioned in a presentation. Loans up to Rs 2 crores capped at 7.5 per cent interest will be offered to hospitals and nursing properties for setting up oxygen plants and will be backed by one hundred per cent assure cover of NCGTC below ECLGS 4.. Also, organization loans for healthcare facilities up to Rs one hundred crores will be offered by banks to set up or expand healthcare infrastructure and to suppliers of healthcare merchandise. Moreover, unsecured individual Loans to folks from Rs 25,000 to Rs 5 lakhs will be offered to salaried, non-salaried, and pensioners for meeting Covid remedy.
MSMEs eligible for restructuring as per RBI suggestions of May 5, 2021, and which had availed loans below ECLGS 1. with the general period of 4 years (like interest repayment only throughout the very first 12 months and repayment of principal and interest in 36 months) will now be capable to avail a tenor of 5 years. This suggests the period of repayment of interest would be now 24 months. The government had also announced an extra 10 per cent help of the outstanding credit as of February 29, 2020 for MSME borrowers who have availed ECLGS 1. and are also eligible for restructuring as per RBI suggestions.
The Finance Ministry also removed the ceiling of Rs 500 crore of loan outstanding below ECLGS 3. topic to a maximum extra ECLGS help to every single borrower becoming restricted to 40 per cent or Rs 200 crore, whichever is reduced. Moreover, it also incorporated the Civil Aviation sector in ECLGS 3..