Emergency Credit Line Guarantee Scheme modified and Extended till 31.03.2022

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CS Lalit Rajput
CS Lalit Rajputhttp://enlightengovernance.blogspot.com/
Company Secretary having 5 years of post-qualification experience in the Compliance Management Services industry by serving Corporates including Listed Companies, Corporate Secretarial Firms, and LLP.

Ministry of Finance vide press release 1759251 dated 29th September 2021 has extended the scope of ECLGS’ and scheme extended till 31.03.2022 or till guarantees for an amount of Rs. 4.5 lakh crore are issued under the scheme, whichever is earlier. Further, the last date of disbursement under the scheme has also been extended to 30.06.2022 to support various businesses impacted by the second wave of the COVID 19 pandemic.

EMERGENCY CREDIT LINE GUARANTEE SCHEME (ECLGS) was launched by the Government of India as a special scheme in view of the COVID-19 crisis to provide 100% guarantee coverage to Banks and NBFCs to enable them to extend emergency credit facilities to Business Enterprises / MSMEs in view of COVID-19 to meet their additional term loan/additional working capital requirements.

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A list of modifications has been made in the scheme to enable support to businesses impacted by the second wave of COVID:

  1. Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of up to 10% of total credit outstanding as of 29.02.2020 or 31.03.2021, whichever is higher.
  2. Businesses who have not availed assistance under ECLGS (ECLGS 1.0 or 2.0), can avail of credit support of up to 30% of their credit outstanding as of 31.03.2021.
  3. Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40% of their credit outstanding as of 31.03.2021, to the maximum of Rs.200 crore per borrower;
  4. Incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of a change in cut-off date to 31.03.2021 from 29.02.2020.
  5. Accordingly, Borrowers who have availed assistance under ECLGS and whose credit outstanding as of 31.03.2021 (excluding support under ECLGS) is higher than that on 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0 or 3.0.

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