December 10, 2022

Published from Mumbai, Delhi & Bhopal

Centre modifies ECLGS to give Civil Aviation sector necessary collateral-free liquidity

New Delhi : The Centre has modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100 per cent of their fund based or non-fund based loan outstanding 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 30.8.2022 shall be applicable as it is, Ministry of Finance said in a statement.

The modifications, introduced by Department of Financial services, 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 Union Minister for Finance & Corporate Affairs Nirmala Sitharaman.

Keeping in view the high proportion of non-fund based credit in the overall credit of the civil aviation sector, the eligible borrowers were permitted to avail up to 50 per cent of their highest total fund and non-fund based credit outstanding, subject to a maximum of Rs 400 crore per borrower.

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