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Mahesh

07/10/22 07:17 AM IST

Centre raises credit guarantee limit to help stressed airlines

In News 
  • The Department of Financial Services (DFS) has modified the Emergency Credit Line Guarantee Scheme (ECLGS) for the aviation sector, raising the scheme’s cheaper loan limit to ₹1,500 crore from ₹400 crore to help the sector tide over cash-flow problems.
Changes 
  • Raising the scheme’s cheaper loan limit to ₹1,500 crores from ₹400 crore
  • The airline would be eligible for 100% of its fund-based or non-fund-based loan outstanding or ₹1,500 crores.
  • It was earlier extended beyond March 2022 to March 2023.
About ECLGS 
  • ECLGS ( launched in May 2020) as part of the Centre’s Aatmanirbhar packagein response to the Covid-19 crisis. It is aimed at giving the necessary collateral-free liquidity loans at reasonable interest rates (and 4-year timeline for reimbursement) to support small businesses struggling and other sectors including aviation.
  • 100% guarantee is provided by the National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) – banks, financial institutions and Non-Banking Financial Companies (NBFCs).
  • First-time borrowers and Non-Performing Asset (NPA) accounts cannot raise funds under the scheme.
Source- LiveMint 

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