It also offered to provide an additional 10% dose of eligible funding to all eligible borrowers, who continue to be affected by the prolonged Covid-induced disruptions, under the Emergency Line of Credit Guarantee Scheme ( ECLGS) existing.
The Association of Indian Banks (IBA) has suggested that the government should extend the validity of its Rs 4.5 lakh-crore guaranteed loan scheme for businesses and individuals preferably by one year until March 2023. It has also proposed to provide an additional 10% dose of eligible funding for all eligible borrowers, who continue to be affected by the prolonged Covid-induced disruptions, under the Emergency Line of Credit Guarantee Scheme (ECLGS) existing.
In September 2021, the government had extended the validity of the program by six months until March 2022, or until the limit is exhausted, whichever comes first. In a letter to Financial Services Department Secretary Debasish Panda on January 15, IBA Chief Executive Sunil Mehta said that given the spread of the latest variant of Covid, MSMEs have not still recovered from the stress.
Thus, government support through the ECLGS must continue “until the economy regains its strength”. “This will help banks continue their support to sectors severely affected by the pandemic and ensure the availability of vital liquidity support for affected MSMEs,” Mehta wrote.
“As the current variant of the virus is less deadly, we hope it will gradually fade and the economic recovery, which has already begun, will become firmly established, resulting in abundant cash flow to support the operations of the MSMEs and take care of their repayment obligations,” he added.
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