The finance ministry on Wednesday modified the Emergency Credit Line Guarantee Scheme ,ECLGS) by growing the loan restrict to Rs 1,500 crore from Rs 400 crore underneath the scheme. The restrict has been raised to assist the Covid-hit trade tide over liquidity stress.

Recognizing that an environment friendly and robust civil aviation sector is important for the financial improvement of the nation, the Department of Financial Services (DFS) has modified the ECLGS on Tuesday to reinforce the utmost mortgage quantity eligibility for airways, reported PTI citing an official assertion.

As per the modified ECLGS 3.0, an airline could be eligible for “100 per cent of their fund based or non-fund-based loan outstanding as on the reference dates or Rs 1,500 crore, whichever is lower; and of the above, Rs 500 crore shall be considered, based on equity contribution by the owners.”

All different standards phrases and circumstances parameters prescribed underneath the operational pointers of the ECLGS on August 30, 2022, could be relevant as it’s, it stated.

The modifications launched are aimed to offer crucial collateral-free liquidity at affordable rates of interest to tide over their current money movement issues.

Earlier in March 2022, the Emergency Credit Line Guarantee Scheme (ECLGS) was prolonged past March 2022, until March 2023, to implement the announcement made within the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman,

Keeping in view the excessive proportion of non-fund based mostly credit score within the general credit score of the civil aviation sector, the eligible debtors had been permitted to avail as much as 50 per cent of their highest complete fund and non-fund based mostly credit score excellent, topic to a most of Rs 400 crore per borrower, it stated.

The ECLGS was introduced in May 2020 in wake of the outbreak of COVID-19 to assist numerous sectors, particularly within the MSME section, to get credit score at a concessional fee of seven per cent.

Post announcement, the scheme was modified a number of occasions relying on demand of varied industries. Besides, the deadline of the scheme was prolonged a number of occasions to help numerous sectors of the economy that had been hit laborious as a result of outbreak of the pandemic.

On August 17, the Union Cabinet authorized the enhancement within the restrict of ECLGS by Rs 50,000 crore to Rs 5 lakh crore. The extra quantity is being earmarked completely for enterprises in hospitality and associated sectors together with the aviation sector.

Loans price round Rs 3.67 lakh crore have been sanctioned underneath ECLGS until August 5, 2022.

(With inputs from PTI)