ECLGS: FinMin hikes loan limit to Rs 1,500 cr for aviation sector

New Delhi, October 5

The Finance Ministry has modified the Emergency Credit Line Guarantee Scheme (ECLGS) for the aviation sector by raising loan limit under the scheme to Rs 1,500 crore from Rs 400 crore to help the Covid-hit industry tide over liquidity stress.

Recognising that an efficient and strong civil aviation sector is vital for the economic development of the country, the Department of Financial Services (DFS) has modified the ECLGS to enhance the maximum loan amount eligibility for airlines, an official statement issued on Wednesday said.

As per the modified ECLGS 3.0, an airline would be eligible for “100% of their fund-based or non-fund-based loan outstanding as on the reference dates or Rs 1,500 crore, whichever is lower; and of the above, Rs 500 crore shall be considered, based on equity contribution by the owners.” All other criteria terms and conditions parameters prescribed under the operational guidelines of the ECLGS on August 30, 2022, would be applicable as it is, it said.

The modifications introduced are aimed to give necessary collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems.

Earlier in March 2022, the Emergency Credit Line Guarantee Scheme (ECLGS) was extended beyond March 2022, till March 2023, to implement the announcement made in the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman.

The eligible borrowers were permitted to avail up to 50% of their highest total fund and non-fund-based credit outstanding, subject to a maximum of Rs 400 crore per borrower, it said. — PTI

Move to tide over liquidity stress

• As per the modified ECLGS 3.0, an airline would be eligible for 100% of their fund-based or non-fund-based loan outstanding as on the reference dates or Rs 1,500 crore, whichever is lower
• The modifications introduced are aimed to give necessary collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems

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