Finance Minister Nirmala Sitharaman has announced that the existing Emergency Credit Line Guarantee Scheme (ECLGS) 1.0 has been extended till March 31, 2021. The FM also announced the launch of ECLGS 2.0 which will provide guaranteed credit support to 26 stressed sectors identified by Kamath Committee.
The FM said that till now amount worth Rs 2.05 lakh crore has been sanctioned to 61 lakh borrowers under the ECLGS 1.0. Out of this, Rs 1.52 lakh crore has been disbursed to the borrowers. The ECLGS was launched as part of the Aatmanirbhar Bharat Abhiyaan, it promised to provide fully guaranteed and collateral-free credit to eligible entities such as MSMEs, business enterprises, individual loans for business purposes and MUDRA borrowers.
ECLGS 1.0 provided additional credit up to 20% of the borrower's total outstanding loans as on February 29, 2020, to entities with outstanding credit up to Rs 50 crore as on February 29, 2020, and an annual turnover of up to Rs 250 crore, which was up to 60 days past its due date as of February 29, 2020.
The ECLGS 2.0 will provide 100% guaranteed collateral-free additional credit at capped interest rates to entities in the 26 stressed sectors, plus the health sector, with credit outstanding of above Rs 50 crore and up to Rs 500 crore as of February 29, 2020. Entities will get additional credit up to 20% of outstanding credit under ECGLS 2.0.
While ECLGS 1.0 had a 1-year moratorium period and a 4-year repayment period, ECGLS 2.0 will be having a 1-year moratorium period and a 5-year repayment period, according to Finance Minister Sitharaman.