Centre extends credit guarantee scheme to health and 26 other sectors

Nirmala Sitharaman

The centre on Thursday notified that it has extended the Emergency Credit Line Guarantee Scheme (ECLGS) to the health sector and 26 other sectors identified by the Kamath Committee.

The scheme was announced by the centre in the first week of November as part of the Rs 2.65 lakh crore Atmanirbhar Bharat 3.0 package.

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“Under ECLGS 2.0 entities with outstanding credit above Rs 50 crore and not exceeding Rs 500 crore as on February 29, 2020, which were less than or equal to 30 days past due as on February 29, 2020 are eligible,” stated the official statement.

As per the communiqué, the loans to be offered under ECLGS 2.0 will be for a five-year tenor, with a 12-month moratorium on repayment of principal.

Also Read: Centre extends credit guarantee scheme to health and 26 other sectors

“These entities or borrower accounts will be eligible for additional funding up to 20 per cent (which could be fund based or non-fund based or both) of their total outstanding credit (fund based only) as a collateral free Guaranteed Emergency Credit Line (GECL), which would be fully guaranteed by NCGTC,” it further added.

It has also been decided to expand ECLGS 1.0 further to entities under ECLGS which had a total credit outstanding (fund-based only) of close to Rs 50 crore as on February 29, 2020, but were not eligible to owing to their annual turnover beyond  Rs 250 crore.

Apart from this, all other existing criteria are unchanged, it said.

The communiqué further stated that it would be applicable to all the loans approved under ECLGS from the date of issuance of these guidelines by NCGTC to March 31, 2021 or till guarantees for an amount of Rs 3 lakh crore is approved under the ECLGS (taking into account both ECLGS 1.0 and 2.0), whichever is earlier.

In August this year, the Reserve Bank of India had set up the committee headed by former ICICI Bank chairman K V Kamath for recommending the financial parameters for the resolution plans under the ‘Resolution Framework for Covid-19 related Stress’ along with sector-specific benchmark ranges for such parameters.

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