AS Part of its push to bolster the financial system amid the second Covid wave, the Government Sunday expanded the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) to supply extra aid to small companies, convey the aviation sector beneath its ambit, and supply a concessional credit score facility of as much as Rs 2 crore in loans for well being services to arrange oxygen era crops.
The general measurement of ECLGS, nonetheless, has been stored at Rs 3 lakh crore, out of which about Rs 45,000 crore is left to be sanctioned. Those who’ve already availed loans beneath the scheme can get extra help of as much as 10 per cent of excellent dues as of February 29, 2020.
Simultaneously, public sector banks have introduced that they’re becoming a member of palms to supply standardised loans to healthcare services and people beneath the Covid mortgage guide proposed by the RBI and the ECLGS.
Under this initiative, debtors will be capable to avail a tenure of 5 years within the revised ECLGS scheme — as towards 4 years earlier — with compensation of curiosity just for the primary 24 months, and of principal and curiosity within the subsequent 36.
The Union Finance Ministry has additionally eliminated the present ceiling of Rs 500 crore of excellent loans for eligibility beneath ECLGS, topic to most extra help to every borrower being restricted to 40 per cent or Rs 200 crore, whichever is decrease.
Since there’s a mortgage cap of Rs 200 crore per firm, the brand new scheme ought to be capable to accommodate a lot of harassed entities, bankers mentioned.
Under the ECLGS scheme to assist corporations tide over the liquidity crunch ensuing from the Covid curbs, banks present extra loans to current debtors with out asking for additional collateral. To encourage banks, these loans are absolutely assured by the Government towards credit score losses.
The scope of the scheme had been expanded thrice earlier than. The scheme will probably be legitimate until September 2021 or until the assure quantity of Rs 3 lakh crore is exhausted, whereas disbursements are permitted until December 2021.
Welcoming the most recent transfer, FICCI president Uday Shankar raised the necessity to improve the restrict of Rs 3 lakh crore. “The new scheme ECLGS 4.0 provides financial support to the critical healthcare sector, and we hope that the banks will go all out in disbursing the loans in a quick and timely manner. It would have further helped if a higher allocation would have also been made under this scheme. FICCI had requested that the quantum be doubled to Rs 6 lakh crore,” he mentioned.
“These initiatives taken by all the PSU banks by coming together…is a significant step in the right direction to mitigate the financial impact due to Covid resurgence on all affected segments of borrowers,” SBI chairman Dinesh Khara mentioned.
“Stressed sectors are already well known, like civil aviation and tourism…(the) civil aviation sector definitely needs a lot of support at this point of time,” Indian Banks Association (IBA) chairman Rajkiran Rai mentioned.
Addressing a press convention Sunday, Khara and Rai mentioned PSU banks will provide unsecured private loans to people for Covid therapy at a concessional charge of curiosity — for SBI, the speed will probably be 8.5 per cent. These loans will begin at a minimal of Rs 25,000 and will be repaid over 5 years.
Similarly, public sector banks will provide loans upto Rs 100 crore at concessional charges for hospitals, nursing houses, clinics, diagnostic centres and pathology labs to arrange or develop healthcare services, Rai mentioned.
These banks have additionally formulated a templated method for loans restructuring for people, small companies and MSMEs upto to Rs 25 crore. “The idea behind this is that there should not be any hardship in terms of any implementation,” mentioned Khara.
On May 5, the RBI had introduced a brand new restructuring scheme for people, small companies and MSMEs to restructure their loans in gentle of the second wave. Entities that had not restructured their loans earlier, with borrowings categorized as normal as on March 31, 2021, are eligible beneath the scheme. “Many lending institutions have got board approval and have started sending messages to eligible customers,” Khara mentioned.
“Under ECLGS, there is still a window for Rs 45,000 crore. The schemes announced today will exhaust the remaining window,” mentioned IBA Chief Executive Officer Sunil Mehta.
Public sector banks have designed three merchandise to supply recent lending help to vaccine producers, hospitals and dispensaries, pathology labs, producers and suppliers of oxygen, ventilators, importers of vaccines and Covid associated medicine logistics corporations and sufferers for therapy.
“Under healthcare business loans for setting up oxygen plants under ECLGS, loans up to Rs 2 crore at an interest rate of 7.5 per cent for hospitals and nursing homes is backed by 100 per cent guarantee cover under ECLGS 4.0,” Khara mentioned.
Khara mentioned banks will provide enterprise loans for healthcare services as much as Rs 100 crore to arrange or develop healthcare infrastructure. They may also provide unsecured private loans — from Rs 25,000 to Rs 5 lakh — for salaried, non-salaried and pensioners for Covid therapy, most of them at concessional charges of curiosity.
So far, the RBI’s restructuring plan has been availed by 60,000 clients as towards 8 lakh plus eligible, the SBI chairman mentioned. The plan covers three classes: Loans as much as Rs 10 lakh for which there will probably be a standardised restructuring provide for sure small companies and MSMEs; above Rs 10 lakh and as much as Rs 10 crore; and, above Rs 10 crore.
