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Covid Pandemic: Centre Enhances Scope of Emergency Credit Scheme

Covid pandemic: Government has prolonged scope of emergency credit score scheme

The Centre has enhanced the scope of the emergency credit score line assure scheme (now termed ECLGS 4.0) owing to disruptions attributable to the second wave of the Corona virus pandemic, the place 100 per cent assure cowl will probably be given for loans as much as Rs two crores to hospitals and nursing properties for organising oxygen crops. The rate of interest has been capped at 7.5 per cent.

According to the choice introduced by the Finance Ministry, debtors who’re eligible for restructuring as per RBI’s May 5, 2021 tips, and who had availed loans below the preliminary ECLGS, for a interval of 4 years, will now be capable to avail loans for a tenure of 5 years.

While earlier as per circumstances of the 4 yr mortgage interval, compensation of curiosity might be completed solely through the first 12 months with compensation of principal and curiosity quantity in 36 months thereafter, now below the circumstances of the 5 yr mortgage interval, compensation of curiosity may be completed for the primary 24 months, whereas compensation of principal and curiosity may be completed in 36 months interval thereafter.

The Government has additionally determined to take away the present ceiling of Rs 500 crore of mortgage excellent for eligibility below ECLGS 3.0. This could be topic to most further ECLGS help to every borrower being restricted to 40 per cent or Rs 200 crore, whichever is decrease;

The validity of ECGLS has been prolonged as much as September 30, 2021 or until ensures for an quantity of Rs three lakh are issued. Also disbursement below the scheme has been permitted as much as December 31, 2021.

The ECLGS was introduced as a part of the Atma Nirbhar Bharat Package (ANBP) by the Centre a yr again, to offer absolutely assured and collateral free further credit score to micro small and medium enterprises (MSMEs) and particular person loans for enterprise functions to the extent of 20 per cent of their credit score excellent as on February 29,2020.

The modifications in ECLGS would improve the utility and affect of the scheme by offering further assist to MSMEs, safeguarding livelihoods and serving to in seamless resumption of enterprise exercise. These modifications will additional facilitate move of institutional credit score at affordable phrases, a press release issued by the Finance Ministry mentioned.

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