Banks can lend about ₹46,000 crore to the micro, small and medium enterprises, civil aviation sector and for setting up oxygen generation plants in hospitals, nursing homes, clinics and medical colleges under the Emergency Credit Line Guarantee Scheme (ECLGS).

Last May, the Cabinet had approved additional funding of up to ₹3-lakh crore to eligible MSMEs and interested MUDRA borrowers through ECLGS.

Under the Scheme, 100 per cent guarantee coverage is provided by National Credit Guarantee Trustee Company Limited (NCGTC) for the additional funding.

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Of the total approved ECLGS amount, loans aggregating ₹2.54-lakh crore have been sanctioned and ₹2.40-lakh crore have been disbursed so far, according to Sunil Mehta, Chief Executive, Indian Banks’ Association (IBA).

Under ECLGS 4.0, unveiled by the government on Sunday, 100 per cent guarantee coverage will be available for loans up to ₹2 crore to hospitals, nursing homes, clinics and medical colleges for setting on-site oxygen plants.

The interest rate on the aforementioned loans has been capped at 7.50 per cent.

ECLGS 3.0 has been modified, whereby the maximum ceiling on credit outstanding of ₹500 crore across all banks has been removed. This is subject to a maximum of 40 per cent or ₹200 crore, whichever is lower.

Under ECLGS 3.0, civil aviation sector has been included as an eligible sector. Earlier, hospitality, travel & tourism, leisure & sporting sectors were eligible.

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Under ECLGS 1.0, additional assistance of up to 10 per cent of the outstanding as on February 29 (borrowers eligible for restructuring) will be offered.

The maximum tenure of the loan has been increased to five years (from four earlier), with repayment of interest only for the first 24 months (12 months earlier) with repayment of principal and interest in next 36 months

Also, the validity of ECLGS is extended to September-end or till guarantees of₹3-lakh crore are issued. Disbursement under the scheme is permitted up to December-end 2021.

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