ECLG; 5 Modifications To Businesses Impacted By Second Wave of COVID

Since its inception, the Emergency Credit Line Guarantee Scheme (ECLGS) has provided relief to over 1.15 million Micro, Small, and Medium Enterprises (MSMEs) and companies. It has assisted qualifying borrowers in satisfying their operating obligations and resuming their companies following the COVID-19 pandemic's disruptions.

Various industry associations and other stakeholders have urged the government to prolong the scheme in order to ensure that qualifying sectors and firms continue to receive help. It has been decided to extend the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) until 31.03.2022 or until guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever comes first.

In order to support various businesses impacted by the second wave of COVID 19 pandemic. Furthermore, the scheme's final distribution deadline has been extended until June 30, 2022.

The scheme has been modified to allow firms affected by the second wave of COVID to get assistance.

1) Existing ECLGS 1.0 and 2.0 borrowers would be eligible for extra credit support of up to 10% of total credit outstanding as of 29.02.2020 or 31.03.2021, whichever comes first.

2)Businesses that have not received help under the ECLGS can receive credit support of up to 30% of their outstanding credit as of March 31, 2021.

3) Businesses in ECLGS 3.0 sectors that have never used ECLGS before can get credit support up to 40% of their credit outstanding as of 31.03.2021, up to a limit of Rs.200 crore per borrower.

4)Existing ECLGS borrowers who have enhanced their eligibility due to the change in the cut-off date from 29.02.2020 to 31.03.2021 can apply for incremental credit within these restrictions.

5) Borrowers who have received ECLGS help and whose credit outstanding as of 31.03.2021 is larger than it was on 29.02.2020 will be eligible for additional support up to the ECLGS 1.0, 2.0, or 3.0 cap.