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Emergency Credit Line Guarantee Scheme (ECLGS)

Posted on August 18, 2022 by admin1  73

In News

  • Recently, the Union Cabinet has approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS).

About

  • The limit is enhanced from Rs. 4.5 Lakh crore to Rs. 5 Lakh crore.
  • The additional amount is being earmarked exclusively for enterprises in hospitality and related sectors till validity of the scheme which is 31.03.2023.  
  • The increase has been done on account of the severe disruptions caused by COVID-19 pandemic on hospitality and related enterprises.
  • Impact of limit enhancement:
    • It will provide much needed relief to enterprises and support the recovery of hospitality sectors.
    • Incentivizing lending institutions with additional credit of up to Rs. 50,000 crore at low cost. 
    • Enabling these business enterprises to meet their operational liabilities and continue their businesses.

About Emergency Credit Line Guarantee Scheme (ECLGS) 

  • Announced as part of the Atma Nirbhar Bharat Package in 2020 
  • Objective: to help businesses including MSMEs to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis.
  • Providing Member Lending Institutions (MLIs), 100 percent guarantee against any losses suffered by them due to non-repayment of the ECLGS funding by borrowers. 
  • Operational domain of the Department of Financial Services (DFS), Ministry of Finance.
  • Limit:
    • The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 4.5 lakh crore.
    • Loans of about Rs. 3.67 Lakh crore have been sanctioned under ECLGS till 5.8.2022.

Source: PIB

 
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