Borrowers availing loans under the Emergency Credit Line Guarantee Scheme (ECLGS) 2.0 will have to repay the principal amount in 48 installments post the one-year moratorium, according to the new scheme’s operational guidelines released on Thursday.
The government termed the credit product under which the guarantee would be given as Guaranteed Emergency Credit Line (GECL), in the guidelines released along with a set of 127 frequently asked questions (FAQs).
Finance minister Nirmala Sitharaman had announced version 2.0 of the scheme while extending the existing scheme till March 31, 2021, during the unveiling of the Atmanirbhar Bharat 3.0 package earlier this month.
The two credit guarantee schemes would run alongside each other and would both be subject to the Rs 3 lakh crore limit that was announced in the original scheme in May.
As of November 12, Rs 2.05 lakh crore worth of loans were sanctioned under the ECLGS with Rs 1.52 lakh crore being disbursed. The second scheme was envisaged to utilise the remaining funds under the umbrella amount.
While ECLGS 1.0 was initially aimed at supporting micro, small and medium enterprises (MSMEs) with total outstanding credit upto Rs 50 crore as on February 29, this year, ECLGS 2.0 will focus on larger entities with total outstanding credit ranging from Rs 50 crore to Rs 500 crore, as on the specified date.
In addition to ECLGS 2.0, where no annual turnover ceiling has been prescribed, it has also been decided to extend ECLGS 1.0 to entities under the scheme which had a total credit outstanding upto Rs.50 crore, but were previously ineligible owing to their annual turnover exceeding Rs.250 crore, a finance ministry statement said.
The latest scheme was intended to support firms falling under the 26 stressed sectors as identified by the Kamath Committee on Resolution Framework and the healthcare sector. These included aviation, logistics, hotels, tourism and real estate among others.
However, “ECLGS is admissible for all business activities. There is no negative list for coverage under ECLGS,” the FAQs said.
Both the schemes provide for a 100% guarantee on credit upto 20% of outstanding loans as at the end of February. However, accounts with overdues beyond 60 days from the specified date (SMA-2 and over) are not eligible for ECLGS 1.0 whereas accounts with overdues beyond 30 days (SMA-1 and over) are not eligible for ECLGS 2.0.
Similarly, the tenor of the loans under the first scheme was capped at four years while that of the second was 5 years. Beyond the one year moratorium on principal payments, borrowers under ECLGS 1.0 have to replay the amount in 36 installments as opposed to 48 for ECLGS 2.0. Interest payments would continue through the moratorium period as well, as per the guidelines.
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