Emergency Credit Line Guarantee Scheme (ECLGS) was announced as a part of the Government’s 20 trillion financial package to help the poor and small businesses tide over the crises that followed the corona virus pandemic and the ensuing lockdown. This collateral-free loan is expected to enable small businesses to pay salaries, rent and to help with restocking expenses.
NCGTC vide their letter Ref No. 3116/NCGTC/ECLGS dated 26.11.2020 has come up with certain amendments in existing guidelines. The existing scheme has been renamed as ECLGS 1.0 and the turnover limit prescribed therein has been removed.
The scope of the existing scheme has been enlarged with introduction of ECLGS 2.0, which is an ‘opt-in’ facility and enables extension of guaranteed emergency credit line facility (in the form of fund based or non-fund based facility or a mix of two) up to 20% of their fund based outstanding as on February 29, 2020 subject to their loan outstanding being above Rs.50 crore & not exceeding Rs.500 crore and day past due up to 30 days as on February 29, 2020. Repayment period for fund based facility under ECLGS 2.0 shall be 5 years including moratorium period of one year. The last date of sanction of facility under the scheme (both ECLGS 1.0 & ECLGS 2.0) has been revised to March 31, 2021 or untill guarantees for an amount of Rs. 3 Lakh Crore are issued by NCGTC, whichever is earlier.
Government of India further extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS) through the introduction of ECLGS 3.0 to cover business enterprises in hospitality, travel and tourism, leisure and sporting sectors whose total fund based outstanding across all lending institutions is up to Rs. 500 crore and days past due are up to 60 days as on 29.02.2020.
The last date of sanction of facility under the scheme (ECLGS 1.0, ECLGS 2.0 and ECLGS 3.0) was allowed up to 30.06.2021 or till guarantees for an amount of Rs. 3 Lakh Crore are issued by NCGTC, whichever is earlier.
ECLGS 3.0 would involve extension of credit up to 40% of total credit outstanding across all lending institutions as on 29 February 2020. The tenor of loans granted under ECLGS 3.0 shall be 6 years including moratorium period of 2 years.
NCGTC vide lets letter dated 04.10.2021 has informed that the ECLGS has been extended upto March 31, 20225 or till guaranttes for an amount of Rs.4.50 lakh crore are issued by NCGTC, whichever is earlier. The following two additional changes have been introduced in the existing guidelines of ECGLS.
- Existing borrowers under ECGLS 1.0 & 2.0 shall be eligible for additional credit support upto 10% (over and above 20% availed) of the fund based outstanding as on 29.02.2020 or 31.03.2021, whichever is higher, subject to meeting other terms and conditions of the scheme guidelines.
- Existing borrowers under ECGLS 3.0 shall be eligible for incremental credit support based on outstanding as on 29.02.2020 or 31.03.2021, whichever is higher, subject to meeting other terms and conditions fo the scheme guidelines.
- Borrowers and Member Lending Institutions who have not availed support under ECGLS and meet the eligibility criteria specified under ECLGS 1.0, 2.0 & 3.0 as on March 31, 2021(instead of February 29, 2020) shall be eligible for additional support upto the specified limits.
The detailed operating Guidelines on ECLGS, updated as on October 01,2021, have been uploaded on our website. Member Banks are requested to publicise these modifications and provide support to the eligible borrowers.
For more details, click on the below link