Emergency Credit Line Guarantee Scheme (ECLGS) scheme
- July 5, 2020
- Posted by: admin1
- Category: DPN Topics
As per Finance Ministry data, banks have sanctioned 36.7 per cent of the targeted Rs 3 lakh crore under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme for stressed micro, small and medium enterprises (MSMEs).
- Finance Minister on May 13 announced collateral-free loans up to Rs 3 lakh crore backed by government guarantee.
- The 100% collateral-free MSME loan is being called the Emergency Credit Line Guarantee Scheme (ECLGS), which is being provided by the National Credit Guarantee Trustee Company (NCGTC) to banks, NBFCs and Financial Institutions (FIs).
- The Scheme is valid for existing customers of a bank, NBFC or FI. This means this scheme is not for new borrowers. Also, the loan account should be less than or equal to 60 days past due as on 29th February, 2020 and the borrower has not been classified as SMA 2 or NPA by any of the lender as on 29th February, 2020. A borrower must also be registered under GST, unless the business is not required or exempted from having a GST registration.
- In view of the critical role of the MSME sector in the economy and in providing employment, the proposed Scheme is expected to provide much needed relief to the sector by incentivizing MLIs to provide additional credit of up to Rs.3 lakh crore to the sector at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.
- By supporting MSMEs to continue functioning during the current unprecedented situation, the Scheme is also expected to have a positive impact on the economy and support its revival.