The government on Wednesday extended the Rs 3-lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) until June 30, 2021 and widened its scope to cover hospitality, travel, tourism and sports.
“In recognition of the continuing adverse impact of Covid on certain service sectors, the government has now extended the scope of ECLGS 3.0 to cover business enterprises in hospitality, travel & tourism, leisure and sporting sectors which had, as on February 29, 2020, credit outstanding not exceeding Rs 500 crore and overdue, if any, were for 60 days or less,” the government said in a statement.
“The sectors which benefit under ECLGS 3.0 can avail additional funding of up to 40% of exposure as of February 2020 end, with a longer loan tenure of six years including two years of moratorium,” said ICRA senior VP Karthik Srinivasan. He added that the extension of ECLGS 1.0 and ECLGS 2.0 by three months to September 30, 2021 will provide additional headroom for borrowers if they have not utilised the sanctioned facility earlier.
“ECLGS has been instrumental in providing liquidity relief to borrowers and addressing their cash-flow mismatches. This also reduced the loan restructuring volumes for the lenders,” said Srinivasan.
