COVID relief: Centre extends validity of ₹3L Cr emergency credit scheme

Makes civil aviation sector eligible under ECLGS 3.0; offers 100% guarantee for loans to hospitals to set up oxygen generation units

Disbursement under the ECLGS 4.0 scheme is now permitted up to December 31, 2021.

As part of its COVID relief initiatives, the Finance Ministry on Sunday extended the validity of the fourth edition of the Emergency Credit Line Guarantee Scheme (ECLGS 4.0) to September 30, 2021, or till guarantees for an amount of ₹3 lakh-crore are issued. The earlier deadline had been June 30. Disbursement under the scheme is now permitted up to December 31, 2021.

Borrowers eligible for the latest loan restructuring scheme who had availed loans under ECLGS 1.0 — with a tenure of four years (including repayment of interest only during the first 12 months and principal + interest in 36 months thereafter) — can now avail a tenure of five years. This means they can repay interest alone for the first 24 months and then repay principal + interest in 36 months.

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“The modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in a seamless resumption of business activity. These changes will further facilitate the flow of institutional credit at reasonable terms,” the Finance Ministry said in a release.

The Finance Ministry also announced that for healthcare centres setting up on-site oxygen generation plants, the Centre will offer 100% guarantee cover for loans up to ₹2 crore, at an interest rate of not more than 7.5%.

The Ministry further said the civil aviation sector will be eligible to avail funds under the ECLGS 3.0 scheme. At present, there is a ceiling of ₹500 crore of loan outstanding for eligibility under that scheme — that is now being removed.

SBI gets set for relief steps

Meanwhile, addressing a press conference on Sunday, State Bank of India (SBI) Chairman Dinesh Khara said the bank will be able to build a loan book of ₹2,000 crore through the expanded ECLGS, based on a preliminary assessment. Indian Banks’ Association (IBA) Chairman Rajkiran Rai and Chief Executive Officer Sunil Mehta were also present at the event.

“Now, ₹2.54 lakh crore (under ECLGS) has been covered. There is still a window for ₹45,000 crore,” said Mehta. “That window will depend on how long it will take.” The schemes announced on Sunday will exhaust the remaining window, media reports quoted him as saying.

On May 5, Reserve Bank of India Governor Shaktikanta Das had announced a slew of measures to help SMEs (small and medium enterprises) and other bank customers, including individuals, address COVID-led disruptions. Khara said the SBI and other public sector banks (PSBs) will roll out the measures announced by the RBI regarding loans for SMEs.

PSBs have put together a templated approach for loan restructuring of up to ₹25 crore, he said. This will cover small businesses, MSMEs (micro and small and medium enterprises) as well as individuals, he added.

Customers who wish to restructure their loans can file an application on the bank portal or submit it manually at the local branch. Under the earlier scheme, against the eligible customer base of over 8 lakh, just 60,000 customers had availed the scheme, said Khara.

Changes in SBI withdrawal limit

On Saturday, SBI said it has increased the non-home cash withdrawal limits through cheque and withdrawal challans. “To support our customers in this pandemic, SBI has increased the non-home cash withdrawal limits through cheque and withdrawal form,” it tweeted.

The new norms are:

  • Cash withdrawal limit for self (using challan accompanied by SB account passbook): ₹25,000
  • Cash withdrawal limit for self (using cheque): ₹1,00,000
  • Cash withdrawal limit by third party: ₹50,000 (only cheque)

The new limits will be valid till September 30. It may be noted that no cash payments to third parties through withdrawal forms will be allowed.

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