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Govt widens scope of mortgage assure scheme


The Finance Ministry on Wednesday expanded the scope of the Rs 5 lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) to help MSMEs engaged in journey, tourism and hospitality sectors to beat the impression of the COVID-19 pandemic impression.

The protection, scope and extent of advantages beneath ECLGS 3.Zero pertaining to hospitality, journey, tourism and civil aviation sectors have been expanded, the ministry mentioned in an announcement.

Finance Minister Nirmala Sitharaman whereas asserting the Budget 2022-23 had prolonged the validity of the scheme by one other one 12 months until March 2023, and likewise elevated the whole quantity to be sanctioned beneath the scheme from Rs 4.5 lakh crore to Rs 5 lakh crore.

As per the newest modification, new debtors, within the sectors lined beneath ECLGS 3.0, who’ve borrowed between March 31, 2021, and January 31, 2022, will now be eligible to avail the emergency credit score amenities.

Also, the credit score restrict for eligible debtors has been elevated to 50 per cent of their fund-based credit score excellent from 40 per cent earlier.

“Eligible borrowers in all such sectors (other than the civil aviation sector) are now permitted to avail up to 50 per cent of their highest fund-based credit outstanding on any of three reference dates (Feburary 29, 2020, March 31, 2021 and January 31, 2022), as against the earlier limit of 40 per cent of the higher of their fund-based outstanding on either of two reference dates (February 29, 2020 and March 31, 2021),” the ministry mentioned.

The enhanced restrict is topic to a most of Rs 200 crore per borrower, it added.

Individuals and proprietary considerations within the sectors lined beneath ECLGS 3.Zero can even now avail of emergency credit score amenities.

The recent modifications are aimed toward enabling companies in these contact-intensive sectors to get additional help by enhanced protection and collateral-free liquidity on capped rates of interest/charges, it mentioned.

Keeping in view the excessive proportion of non-fund primarily based credit score within the total credit score of the civil aviation sector, the ministry mentioned, eligible debtors within the civil aviation sector are actually permitted to avail of non-fund primarily based emergency credit score amenities as properly beneath ECLGS 3.0.

As in opposition to the sooner restrict of availing as much as 40 per cent of their fund-based excellent, debtors can now avail as much as 50 per cent of their highest whole fund and non-fund primarily based credit score excellent.

Further, to decrease their value of accessing non-fund-based credit score, financial institution ensures, letters of credit score and different non-fund primarily based amenities sanctioned beneath ECLGS 3.Zero might be issued with none money margin and topic to a cap of 0.5 per cent every year on the payment/fee, it mentioned.

Since its launch in May 2020, loans value Rs 3.19 lakh crore has been sanction until March 25, 2022. About 95 per cent of the ensures issued are for loans sanctioned to micro, small and medium enterprises. 

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