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Govt Expands ECLGS by Allowing Contact-Intensive Sectors

The Centre has extended the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) by allowing contact-intensive sectors to benefit up to 50 per cent of their credit outstanding and the per borrower cap for the civil aviation sector to Rs 400 crore. The ECLGS scheme has been expanded by one year until March 2023 and allows new borrowers in the hospitality and related sectors who have borrowed from March 31, 2021, to January 31, 2022, to avail of funds under the scheme.

Individuals and proprietary concerns in sectors such as hotels and restaurants, marriage halls, canteens, travel and tourism, agents, tour operators, car repair services, spas and beauty parlours, and others will also be able to avail of credit facilities under ECLGS. The Centre has also allowed the aviation sector to avail of 50 per cent of their credit outstanding. Like other contact-intensive sectors, the highest credit outstanding will be referred on any of the three reference dates of February 2020, March 2021 or January 2022.

Eligible borrowers in the civil aviation sector have also been permitted to avail of non-fund based emergency credit facilities to lower their cost of accessing non-fund-based credit. Bank guarantees, letters of credit, among others, will be issued without any cash margin and subject to a cap of 0.5 per cent per year on the fee or commission. “The changes introduced are aimed at allowing businesses in these sectors to get support via enhanced coverage and collateral-free liquidity on capped interest rates,” the Finance Ministry said in a statement.

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