The government has modified the  Emergency Credit Line Guarantee Scheme to extend ECLGS including borrowed credit to eligible MSMEs’ under ECLGS 1.O to five years. According to Cotton Textiles Export promotion Council (Texprocil), this will help micro, small and medium enterprises (MSMEs), including textile MSMEs.

As per the new rules, borrowers who are eligible for restructuring as per RBI guidelines as of May 5, 2021 and had availed loans under ECLGS 1.0 of overall tenure of four years comprising of repayment of interest only during the first 12 months with repayment of principal and interest in 36 months can now extend their ECLGS loan repayment tenure to five years

The new scheme also provides an additional ECLGS assistance of up to 10 per cent of the outstanding as on February 29, 2020 to borrowers covered under ECLGS 1.0 has also been extended.

The current ceiling of Rs 500 crore of loan outstanding for eligibility under ECLGS 3.0 has also been removed, subject to maximum additional ECLGS assistance to each borrower is being limited to 40 per cent or Rs 200 crore, whichever is lower. Further, the validity of ECLGS extended to September 30, 2021 or till guarantees for an amount of Rs 3 lakh crore are issued. Disbursement under the scheme is permitted up to December 31, 2021.

The removal of the ceiling and extension of ECGLS will enable more units to avail benefits, opines Manoj Patodia, Chairman, Texprocil