In a move that will enable even delinquent borrowers to avail of additional bank loans, the government on Friday extended the scope of its Emergency Credit Line Guarantee Scheme to those with repayment overdues of up to 60 days.
The department of financial services said the facility would be available to 26 stressed sectors identified by a committee headed by former
ICICI Bank chief K V Kamath. The list includes everything from healthcare, aviation and corporate retail outlets to power, cement, construction and textiles.
So borrowers from these sectors with outstanding loans of Rs 50-500 crore can avail of the special facility.
The amendment to the Rs 3 lakh crore
ECLGS was announced as more cities went under a fresh lockdown following a fresh wave of Covid-19 cases. Around 80% of the scheme is understood to have been utilized which leaves around Rs 60,000 crore worth of loans available under the scheme that was originally meant for micro, small and medium enterprises that were facing a liquidity crunch.
With MSME units not using up the entire limit, the government first extended it to professionals before opening it to the hospitality, travel and tourism sectors, which have been hit hard by Covid-19.
Now, the scheme will be available to borrower accounts classified as Special Mention Account (SMA)-0 or SMA-1 as of February 29, 2020. These accounts are those where the overdue period is between 31 to 60 days. Initially, this facility was available to only those who were up to date with their payments.
The fresh funding, backed by a government guarantee, can help these borrowers tap loans from banks, and even clear their past dues, enabling businesses to come back on track as the demand situation normalises.
The government has said that the scheme would be available to loans sanctioned under the guaranteed emergency credit line during the period from May 23, 2020, to June 30, 2021, or till guarantees for an amount of Rs. 3 lakh crore are issued, whichever is earlier.