Monday, May 31, 2021

With Rs 45k cr kitty, govt extends loan guarantee scheme to airlines

Mumbai: The government on Sunday expanded a scheme that guarantees loans to Covid-hit businesses to include the aviation sector with maximum assistance for a borrower capped at Rs 200 crore. The fourth iteration of the Emergency Credit Line Guarantee Scheme (ECLGS), which has been extended up to September 30, will also fully guarantee loans up to Rs 2 crore to hospitals for setting up oxygen plants.

The ECLGS was introduced by the government to provide relief to small businesses after the first phase of the lockdown last year. Under the latest ECLGS 4.0, an additional 10% of credit limits can be provided and more time can be given to eligible borrowers. The current ceiling of Rs 500 crore of loan outstanding for eligibility under ECLGS 3.0 has been removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40% or Rs 200 crore, whichever is lower. The scheme provided for guarantees on loans of up to Rs 3 lakh crore.

SBI chairman Dinesh Khara said the scheme had proved its value in the first phase of the pandemic. Banks have sanctioned loans worth over Rs 2.5 lakh crore under the scheme, of which Rs 2.4 lakh crore has been disbursed. This would mean that banks have headroom to take up fresh proposals worth about Rs 45,000 crore.

In ECLGS 1.0, borrowers could avail of a loan of four years and repay only interest for the first year. If eligible for restructuring, they can now extend the loan for five years by repaying only the interest component in the first two years.

“Our preliminary assessment is that we should be in a position to build a book of about Rs 2,000 crore,” Khara said, referring to fresh loans under ECLGS 4.0. The loans to hospitals, nursing homes and medical colleges for setting up an oxygen plant would be available at a concessional interest rate of 7.5%.

31/05/21 Times of India

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