Emergency Credit Line Guarantee Scheme

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Emergency Credit Line Guarantee Scheme (ECLGS)

Name of the Scheme:

ECLGS‐1.0 refers to the scheme for providing 100% Guarantee to member lending institutions in respect of eligible credit facility extended by them to its borrowers whose total credit outstanding (fund based only) across all lending institutions and days past due as on February 29, 2020 was upto Rs.50 crore and upto 60 days respectively.
ECLGS‐2.0 refers to the scheme for providing 100% Guarantee to member lending institutions in respect of eligible credit facility extended by them to its borrowers in the 26 sectors identified by the Kamath Committee on Resolution Framework vide its report dated 04.09.2020 and the Healthcare sector whose total credit outstanding (fund based only) across all lending institutions and days past due as on February 29, 2020 was above Rs.50 crore and not exceeding Rs.500 crore and upto 60 days respectively. (The 26 sectors are power, construction, iron and steel manufacturing, roads, real estate, trading wholesale, textiles, chemicals, consumer durables/FMCG, non-ferrous metals, pharma, logistics, gems and jewellery, cement, auto components, hotels, mining, plastic products manufacturing, automobile manufacturing, auto dealership, aviation, sugar, port and port services, shipping, building materials, and corporate retail outlets.)
ECLGS‐3.0 refers to the scheme for providing 100% guarantee to member lending institutions in respect of eligible credit facility extended by them to its borrowers in the Hospitality, Travel & Tourism and Leisure & Sporting sectors whose total fund based outstanding across all lending institutions is upto Rs.500 crore and days past due are upto 60 days as on 29.02.2020.

Facility Type: Working Capital Term Loan

Validity: Scheme is available up to June 30, 2021 or on reaching the threshold stipulated by the Government of India under Emergency Credit Line Guarantee Scheme (ECLGS).

Purpose: To augment the Business Enterprises/Micro, Small & Medium Enterprises (MSME) borrowers working capital needs, to meet operational liabilities and restart their businesses which have been impacted due to the COVID-19 crisis.

Tenure:

ECLGS 1.0 ‐ 48 months including principal moratorium for first 12 months.
ECLGS 3.0 ‐ 60 months including principal moratorium for first 12 months.
ECLGS 3.0 ‐ 72 months including principal moratorium for first 24 months.

Repayment:

ECLGS 1.0 ‐ The principal shall be repaid in 36 equal instalments after the moratorium period is over.
ECLGS 2.0 ‐ The principal shall be repaid in 48 equal instalments after the moratorium period is over.
ECLGS 2.0 ‐ The principal shall be repaid in 48 equal instalments after the moratorium period is over.

(Interest under ECLGS 1.0, 2.0 and 3.0 to be paid on a monthly basis even during Moratorium)

Interest Rate: ECLGS 1.0, ECLGS 2.0 & ECLGS 3.0 - Upto 14% p.a.

Security:

  1. The additional Term loan facility granted under ECLGS 1.0 or 2.0 or 3.0 shall rank second charge with the existing credit facilities in terms of cash flows (including repayments) and security, with charge on the assets financed under the Scheme
  2. No additional collateral shall be asked for additional funding under GECL.
  3. The second charge been waived in respect of all loans up to Rs.25 lakh (outstanding as on February 29, 2020 plus loan sanctioned under GECL), subject to MLI ensuring to safeguard the interests of NCGTC.

Key highlights:

  1. ECLGS 1.0 - Eligible Borrowers with up to INR 50 crore outstanding as on Feb 29, 2020 will be eligible.
    ECLGS 2.0 – Eligible Borrowers above INR 50 Crores and not exceeding INR 500 crore outstanding as on Feb 29, 2020 will be eligible.
    ECLGS 3.0 – Eligible Borrowers with up to INR 500 crore outstanding as on Feb 29, 2020 will be eligible.
  2. ECLGS 1.0 - Loans sanctioned under ECLGS would be up to 20% of the borrower’s total outstanding credit as on Feb 29, 2020.
    ECLGS 2.0 - Loans sanctioned under ECLGS would be up to 20% of the borrower’s total outstanding credit as on Feb 29, 2020.
    ECLGS 3.0 - Loans sanctioned under ECLGS would be up to 40% of the borrower’s total outstanding credit as on Feb 29, 2020.
  3. Loans provided to Business Enterprises/MSMEs constituted as Proprietorship, Partnership, registered company, trusts and Limited Liability Partnerships (LLPs) shall be eligible under the Scheme.
  4. Business Enterprises/MSME borrower must be Goods and Services Tax (GST) registered in all cases where such registration is mandatory. This condition will not apply to Business Enterprises/MSMEs that are not required to obtain GST registration.
  5. Borrower accounts which had NPA or SMA-2 status as on Feb 29, 2020 shall not be eligible under the scheme.
  6. No additional collateral requirement.

Guarantee: The facility would be backed by 100% guarantee the Government of India through implementing agency - NCGTC (National Credit Guarantee Trustee Company).

For detailed guidelines and FAQs on ECLGS, visit https://www.eclgs.com.
For further details on the GECL product, please contact our Branch.