India closes COVID-era Emergency Credit Line Guarantee Scheme
As of March 31, 2023, the total amount of guarantees provided under ECLGS stood at Rs 3.65 lakh crore out of Rs 5 lakh core, and the total amount of loans sanctioned stood at Rs 3.73 lakh core, sources privy to the developments told CNBC-TV18.
The Indian government on March 31, 2023, closed down the Emergency Credit Line Guarantee Scheme (ECLGS), as the Centre sees no COVID-19-related emergency for loan guarantees, according to multiple people familiar with the development.
ECLGS has been a crucial lifeline for businesses struggling to stay afloat during the COVID-19 pandemic. The scheme was launched in May 2020 and has since been extended several times.
As of March 31, 2023, the total amount of guarantees provided under ECLGS stood at Rs 3.65 lakh crore out of Rs 5 lakh core, and the total amount of loans sanctioned stood at Rs 3.73 lakh core, sources privy to the developments told CNBC-TV18.
Also Read: Pakistanis reel under skyrocketing inflation — 'Two-time meal is not possible with what I earn'
Also, Rs 2.93 lakh crore amount was disbursed on guarantees under ECLGS, and the nonperforming asset (NPA) ratio stood at 4.38 percent or Rs 16,000 crore approximately, said people familiar with the matter.
ECLGS is a loan guarantee scheme that provides financial assistance to businesses in the micro, small, and medium enterprises (MSMEs) sector, as well as those in the aviation, tourism, and hospitality sectors.
Around 18 lakh accounts or 15 percent of 1.19 crore borrowers who availed credit under ECLGS have turned into NPAs as of March 31, 2023, sources in the know told CNBC-TV18.
Under the scheme, eligible borrowers can avail of a loan of up to 20 percent of their total outstanding credit as of February 29, 2020. The government provides a guarantee to the lender to cover any default by the borrower.
In the 2022-23 Budget, the government extended the ECLGS till March 31, 2023. However, the National Institute of Bank Management (NIBM) has been tasked with submitting an assessment report on the scheme.
(Edited by : Shoma Bhattacharjee)
First Published: Apr 11, 2023 5:09 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Mark Mobius sees immense potential for India in tech innovation and manufacturing
May 15, 2024 5:21 PM
INDIA bloc will win majority seats in Bihar, says Tejashwi Yadav
May 15, 2024 4:20 PM
Lok Sabha Election 2024 — how regional parties are challenging national giants in Phase-4
May 15, 2024 6:17 AM
Supreme Court refuses plea seeking 6-year poll ban on PM
May 14, 2024 7:14 PM