The Ministry of Finance has increased the loan amount eligibility for the aviation sector under the Emergency Credit Line Guarantee Scheme (ECLGS) to 100 per cent of their fund based or non fund-based loan or Rs 1,500 crore, whichever is lower.
“Ministry of Finance, has modified the Emergency Credit Line Guarantee Scheme (ECLGS) yesterday to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund based or non-fund-based loan outstanding as on the reference dates or Rs. 1,500 crore, whichever is lower; and of the above, Rs. 500 crore shall be considered, based on equity contribution by the owners,” said the ministry in a statement.
The eligible borrowers were previously permitted to avail up to 50 per cent of their highest total fund and non-fund based credit outstanding, subject to a maximum of Rs 400 crore per borrower.
The Department of Financial Services said that an efficient and strong civil aviation sector is vital for the economic development of the country. It said that the modifications have been made to give necessary collateral-free liquidity at reasonable interest rates in order for the sector to brave the current cash flow issues.
The ministry said that all other criteria terms and condition parameters prescribed under the operational guidelines of ECLGS will remain applicable.
The ECLGS was, in March, extended till March 2023. The scheme was announced in May 2020 amid the COVID-19 outbreak to help various sectors to get credit at a concessional rate. Depending on the requirements of the various sectors, the scheme was modified several times, and the deadline extended too.
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