In a move that will enable even delinquent borrowers to avail of additional bank loans, the Government has recently extended the scope of its Emergency Credit Line Guarantee Scheme to those with repayment overdues of up to 60 days.
The department of financial services stated that the facility would be available to 26 stressed sectors identified by a committee headed by former ICICI Bank chief K.V. Kamath. The list includes everything from aviation, healthcare and corporate retail outlets to power, construction, cement and textiles. So borrowers from these sectors with outstanding loans of Rs. 50 to 500 crore can avail of the special facility.
The amendment to the Rs. 3 lakh crore ECLGS was announced as more cities went under a fresh lockdown following a second wave of COVID-19 cases. Around 80% of the scheme is understood to have been utilized which leaves around Rs. 60,000 crore worth of loans available under the scheme that was originally meant for micro, small and medium enterprises that were facing a liquidity crunch.
With MSME units not using up the entire limit, the government first extended it to professionals before opening it to the hospitality, travel and tourism sectors, which have been hit hard by COVID-19. Now, the scheme will be available to borrower accounts classified as Special Mention Account (SMA)-0 or SMA-1 as of February 29, 2020. These accounts are those where the overdue period is between 31 to 60 days.