Emergency Credit Line Guarantee Scheme (ECLGS):
The Emergency Credit Line Guarantee Scheme (ECLGS) will be extended to cover the next fiscal as well, with expanded guarantee cover of Rs 5 lakh crore, Finance Minister Nirmala Sitharaman said in her budget presentation.
- An additional guarantee amount of Rs 50,000 crore has been announced for the hospitality sector.
- Under ECLGS, which is for helping companies tide over liquidity crunch resulting from Covid-19 curbs, banks provide additional loans to existing borrowers without asking for extra collateral.
- To encourage banks, these loans are fully guaranteed by the government against credit losses.
- This scheme will be key to ensure that MSMEs impacted by intermittent lockdowns in states get funding to stay afloat.
- Sanctions and disbursements under the facility are relatively faster since lenders have the Central government guarantee in case of default against these loans.
- Hotels, restaurants, canteens, caterers, marriage halls, tour operators, as well as amusement parks and theatres can avail the facility.
- Accounts that are classified as non-performing assets or where overdues have crossed 60 days (SMA-II) are not eligible.