Govt enhances ECLGS for aviation sector
The Emergency Credit Line Guarantee Scheme (ECLGS) has extended the loan amount qualifying for the aviation sector to 100% of their fund-based or non-fund-based loan, or Rs. 1,500 crore, whichever is lesser.
The Emergency Credit Line Guarantee Scheme (ECLGS) was modified by the Ministry of Finance yesterday to increase the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund-based or non-fund-based loan outstanding as on the reference dates or Rs. 1,500 crore, whichever is lower. Of the above, Rs. 500 crore shall be considered, based on equity contribution by the owners.
Prior to this, the qualifying borrowers were allowed to take out up to 50% of the highest amount of outstanding fund and non-fund based credit, with a cap of Rs 400 crore per borrower.
According to the Department of Financial Services, a productive and robust civil aviation industry is essential for the nation’s economic growth. In order for the industry to overcome the current cash flow problems, it was stated that the improvements had been made to provide the necessary collateral-free liquidity at competitive interest rates.
According to the ministry, all other qualifying terms and condition parameters outlined in the ECLGS operational guidelines would continue to be valid.
The ECLGS was extended in March through March 2023. In May 2020, during the COVID-19 epidemic, a programme was announced to assist different sectors in obtaining loans at a reduced rate. The plan was altered numerous times, and the deadline was also extended, to meet the needs of the various sectors.