Expansion Of Emergency Credit Line Guarantee Scheme

05 April 2021 Current Affairs:Recently, the government has extended the 3 lakh-crore rupees Emergency Credit Line Guarantee Scheme (ECLGS) until June 30, 2021, and has also expanded its scope to new areas, including hotels, travel and tourism. ECLGS was launched in May 2020 as part of the Atmanirbhar plan, the center of the response to the Covid-19 crisis. The purpose is to support small businesses that are struggling to meet their operational responsibilities due to the implementation of the national lockdown. Highlights: ECLGS 1.0: ♦ As of February 29, 2020, fully secured and collateral free additional credit is provided to MSMEs, business enterprises, MUDRA borrowers and personal loans for business purposes, the amount of which is 20% of the outstanding credit. ♦ The total income of eligible MSMEs does not exceed Rs 250 crore, and the turnover does not exceed Rs 100 crore. ECLGS 2.0: ♦ The revised version focuses on entities in the 26 stressful industries identified by the Kamath Committee and the medical industry with of more than Rs. 50 crore and up to Rs. 500 crore as of 29th February, 2020. ♦ The scheme also stipulates that the maturity date of the borrower’s account must be less than or equal to 30 days on February 29, 2020, that is, as of the 29th February 2020, no lender should classify it as SMA 1, SMA 2, or NPA. ♦ The revised scheme also has a five-year repayment period, compared to four years in ECLGS 1.0. ECLGS 3.0: ♦ As of February 29, 2020, the plan extends the credit lines of all lending institutions to 40% of the total outstanding credit. ♦ The loan period granted under ECLGS 3.0 is 6 years, including a 2-year suspension period. ♦ Covers companies in the field of hotels, travel and tourism, leisure and sports.