Rs 3-lakh-crore assured mortgage programme: Now, cheaper credit score to arrange oxygen vegetation


By end-February, loans of Rs 2.46 lakh crore had been sanctioned underneath the scheme. The demand thereafter hasn’t risen a lot, bankers say.

The federal government on Saturday launched a brand new model of its Rs three-lakh-crore assured mortgage programme, underneath which cheaper credit score will probably be made accessible to hospitals for organising on-site oxygen technology vegetation to combat the pandemic.

It additionally allowed civil aviation corporations, struggling to deal with the harm attributable to the pandemic, to faucet an earlier avatar of the Emergency Credit score Line Assure Scheme (ECLGS) by increasing its scope.

The validity of the ECLGS has additionally been prolonged by three months by September 30 or till ensures for the complete quantity of Rs 3 lakh crore are issued, the finance ministry mentioned in a press release. Equally, the final date of disbursement has been prolonged as much as December 31.

By end-February, loans of Rs 2.46 lakh crore had been sanctioned underneath the scheme. The demand thereafter hasn’t risen a lot, bankers say.

Underneath the ECLGS 4.0 introduced on Saturday, the federal government will provide full assure on loans as much as Rs 2 crore to hospitals, nursing houses, clinics, medical schools for organising on-site oxygen technology vegetation. The rate of interest on these loans has been capped at 7.5%.

The ministry additionally relaxed the tenure of the mortgage reimbursement and launched extra flexibilities. Debtors who’re eligible for restructuring as per the newest RBI tips and had availed of loans underneath ECLGS 1.0 can now repay in 5 years. They need to repay solely curiosity within the first two years, which will probably be adopted by the reimbursement of principal and residual curiosity in three years thereafter.

Previous to the transfer, the mortgage tenure was 4 years. Debtors had been purported to pay solely curiosity within the first 12 months, adopted by the reimbursement of principal and curiosity in three years after that.

Furthermore, the brand new scheme has made a provision of additional ECLGS help of as much as 10% of the excellent as of February 29, 2020, to debtors lined underneath ECLGS 1.0, in sync with restructuring underneath the RBI tips of Could 5, 2021.

Whereas permitting civil aviation corporations to faucet the ECLGS 3.0, the federal government additionally scrapped the extant ceiling of Rs 500 crore of mortgage excellent for eligibility underneath ECLGS 3.0. That is topic to a most further ECLGS help of as much as 40% or Rs 200 crore, whichever is decrease.

Earlier, the ECLGS 3.0 lined companies in hospitality, journey and tourism, leisure and sporting sectors. Eligible corporations should have had whole credit score excellent not exceeding Rs 500 crore as of February 29, 2020, and overdue, if any, was for 60 days or much less, on that date.

“Modifications in ECLGS would improve the utility and influence of ECLGS by offering further assist to MSMEs, safeguarding the livelihoods and serving to in a seamless resumption of enterprise exercise. These modifications will additional facilitate the movement of institutional credit score at cheap phrases,” the finance ministry mentioned.

The tenor of loans granted underneath ECLGS 3.0 could be 6 years, together with a moratorium interval of two years.

The ECLGS 1.0 was introduced as a part of the federal government’s Rs 21 lakh-crore reduction bundle in Could 2020. Underneath this, the federal government had pledged full assure for as much as 20% further, collateral-free working capital loans, topic to the Rs three-lakh-crore restrict. Whereas this scheme was initially meant for less than MSMEs, the federal government has periodically broadened its scope to allow a wider pool of companies and professionals to profit from it.

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