Emergency Credit Line Guarantee Scheme (ECLGS)

In News

• Recently, the Union Cabinet has approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS).

About

• The limit is enhanced from Rs. 4.5 Lakh crore to Rs. 5 Lakh crore.
• The additional amount is being earmarked exclusively for enterprises in hospitality and related sectors till validity of the scheme which is 31.03.2023.  
• The increase has been done on account of the severe disruptions caused by COVID-19 pandemic on hospitality and related enterprises.

• Impact of limit enhancement:
  • It will provide much needed relief to enterprises and support the recovery of hospitality sectors.
  • Incentivizing lending institutions with additional credit of up to Rs. 50,000 crore at low cost. 
  • Enabling these business enterprises to meet their operational liabilities and continue their businesses.

About Emergency Credit Line Guarantee Scheme (ECLGS) 

• Announced as part of the Atma Nirbhar Bharat Package in 2020 
• Objective: to help businesses including MSMEs to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis.
• Providing Member Lending Institutions (MLIs), 100 percent guarantee against any losses suffered by them due to non-repayment of the ECLGS funding by borrowers. 
• Operational domain of the Department of Financial Services (DFS), Ministry of Finance.
• Limit:
  • The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 4.5 lakh crore.
  • Loans of about Rs. 3.67 Lakh crore have been sanctioned under ECLGS till 5.8.2022.

Source: PIB