12th August, 2020
The Managing Directors/CEO's/Owners/Director/Partners/General Managers
All Members of FHRAI
CC: Executive Committee Members of FHRAI
All Regional Associations
Sub:- Expansion of the Emergency Credit Line Guarantee Scheme
Dear Member,
Greetings from FHRAI!
As proposed by the FHRAI during the Webinar on 9th July 2020 with Shri Nitin Gadkari, Hon’ble Minister of Road Transport & Highways and of MSME to expand the scope and coverage of the Emergency Credit Line Guarantee Scheme (ECLGS), The Hon’ble Minister agreed and extended the scheme in sync with the new definition of the MSMEs.
The Government of India recently expanded the Emergency Credit Line Guarantee Scheme (ECLGS) to cover loans given to larger firms as well as to self-employed people and professionals who have taken loans for business purposes, subject to the condition that they fulfil the eligibility criteria.
The Finance Ministry has increased the annual turnover ceiling of companies that could avail loans under the scheme to ₹250 crore from ₹100 crore at present.
ECLGS was rolled out in May 2020 as part of the Centre’s Aatmanirbhar package in response to the Covid-19 crisis. The objective was to support small businesses struggling to meet their operational liabilities due to the imposition of a nationwide lockdown.
The ECLGS provides for the Guaranteed Emergency Credit Line (GECL) facility. The GECL is a loan for which 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).
Credit under GECL is provided up to 20% of the borrower’s total outstanding credit up to Rs. 25 Crores. The expansion of the limits has increased the maximum amount of loans that can be availed under the Scheme to Rs. 10 Crores (20% of 50 crore) from Rs. 5 Crores (20% of 25 crore).
The Operational Guidelines for the ECLGS along with the FAQ on the Scheme are enclosed for your ready reference.
With kind regards,
Gurbaxish Singh Kohli
Vice President
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The Federation of Hotel & Restaurant Associations of India
Regd. Off.: B-82, 8th Floor, Himalaya House, 23 K.G. Marg, New Delhi - 110 001
Tel.: 011-40780780, Email: fhrai@fhrai.com, Website: www.fhrai.com