Emergency Credit Line Guarantee Scheme (ECLGS)

The Emergency Credit Line Guarantee Scheme (ECLGS) will be extended to cover the next fiscal as well, with expanded guarantee cover of Rs 5 lakh crore, Finance Minister Nirmala Sitharaman said in her budget presentation.

An additional guarantee amount of Rs 50,000 crore has been announced for the hospitality sector.

Under ECLGS, which is for helping companies tide over liquidity crunch resulting from Covid-19 curbs, banks provide additional loans to existing borrowers without asking for extra collateral. To encourage banks, these loans are fully guaranteed by the government against credit losses. This scheme will be key to ensure that MSMEs impacted by intermittent lockdowns in states get funding to stay afloat.

Sanctions and disbursements under the facility are relatively faster since lenders have the Central government guarantee in case of default against these loans.

Hotels, restaurants, canteens, caterers, marriage halls, tour operators, as well as amusement parks and theatres can avail the facility. Accounts that are classified as non-performing assets or where overdues have crossed 60 days (SMA-II) are not eligible.