The Finance Ministry has revised the Emergency Credit Line Guarantee Scheme (ECLGS) to increase the loan limit under the scheme from Rs 400 crore to Rs 1,500 crore to help the COVID-hit industry tide over liquidity stress. Recognizing that an efficient and strong civil aviation sector is crucial for the economic development of the country, the Department of Financial Services (DFS) on Tuesday revised the ECLGS to increase the maximum loan amount eligibility for airlines, an official released on Wednesday said. The statement said. ,
As per the revised ECLGS 3.0, an airline will be eligible for “100 per cent of its fund-based or non-fund-based debt as on the reference dates or Rs 1,500 crore, whichever is lower; and Rs 500 crore of the above, to the owners.” will be considered on the basis of equity contribution by ECLGS. All other norms, terms and conditions parameters as prescribed under the Operating Guidelines of ECLGS as on 30th August, 2022 will be applicable, as it is. The amendments introduced are aimed at tackling their current cash flow problems. To provide the required collateral-free liquidity at reasonable interest rates.
Earlier in March 2022, to implement the announcement made by Finance Minister Nirmala Sitharaman in the Union Budget 2022-23, the Emergency Credit Line Guarantee Scheme (ECLGS) was extended from March 2022 to March 2023. Considering the high proportion of non-fund based loans in the overall credit of the civil aviation sector, eligible borrowers were allowed to avail up to 50 per cent of their highest total fund and non-fund based loan outstanding, subject to a maximum of Rs. 400 crores, it said.
ECLGS was announced in May 2020 to help various sectors, especially the MSME segment, get loans at a concessional rate of 7 per cent in the wake of the COVID-19 outbreak. After the announcement, the scheme was revised several times based on the demand of various industries. In addition, the plan deadline was extended several times to support various sectors of the economy due to the outbreak of the pandemic.
On August 17, the Union Cabinet approved raising the ECLGS limit from Rs 50,000 crore to Rs 5 lakh crore. The additional amount is being specifically earmarked for enterprises in related sectors, including the hospitality and aviation sectors. Loans worth about Rs 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.
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