Emergency Credit Line Guarantee Scheme (ECLGS) : Extension
The Union government is looking at a possible extension of the Emergency Credit Line Guarantee Scheme (ECLGS) amid global economic uncertainty and expectation of slower domestic growth next fiscal.
- Emergency Credit Line Guarantee Scheme (ECLGS) was launched by the Government of India in 2020 as a special scheme in view of the Covid-19 crisis.
- Objective is to provide 100 percent guaranteed coverage to the banks, non-banking financial institutions (NBFCs), and other lending institutions to extend emergency credit to business entities that have suffered due to the Covid-19 pandemic and are struggling to meet their working capital requirements.
- ECLGS is under the operational domain of the Ministry of Finance, Department of Financial Services (DFS).
- National Credit Guarantee Trustee Company Ltd (NCGTC) has been set up by the Union Ministry of Finance to manage and provide guarantees to these loans.
- ECLGS was launched in different phases – ECLGS 1.0, ECLGS 2.0, ECLGS 3.0, and ECLGS 4.0. In different phases, the scope of this scheme was increased to include multiple sectors.
- Sanctions/disbursements are made by lending institutions based on assessment of the borrower’s requirements and eligibility.
- Processing charges, foreclosure, and prepayment charges are waived under the scheme..