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Emergency Credit Line Guarantee Scheme 123

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    2nd Apr, 2021

The government has announced an Emergency Credit Line Guarantee Scheme, to mitigate the stress caused by the Covid-19 pandemic on several sectors.

Emergency Credit Line Guarantee Scheme

  • The ECLGS aims to provide 100 percent guaranteed coverage to the banks, non-banking financial institutions (NBFCs), and other lending institutions.
  • The scheme has been started in different gradients namely: ECLGS 1.0, ECLGS 2.0, and ECLGS 3.0.
  • Significance: The scheme is started to extend emergency credit to business entities that have suffered because of the due Covid-19 pandemic and are struggling to meet the working capital requirements.

Stages of ECLGS


  • The ECLGS was launched as a part of the Rs 20 lakh crore Covid-19 relief package under the Aatmanirbhar Bharat Abhiyan. 
  • The scheme aimed to provide Rs 3 lakh crore worth of collateral-free, government-guaranteed loans to micro, small and medium enterprises (MSMEs).


  • ECLGS 2.0 was launched by extending the Rs 3 lakh crore scheme to support 26 stressed sectors identified by the Kamath Committee and the healthcare sector.
  • The tenor of the credit under ECLGS 2.0 was five years, including a one-year moratorium.
  • The ceiling for outstanding credit was increased from Rs 25 crore to Rs 50 crore under ECLGS 2.0.


  • ECLGS 3.0 was announced to extend the Rs 3 lakh crore scheme to support the Hospitality, Travel and Tourism, Leisure, and Sporting sectors.
  • ECLGS 3.0 extended the credit of up to 40 percent of the total credit outstanding across all lending institutions from 20 percent earlier.
  • The tenor of loans granted under ECLGS 3.0 is six years, including a moratorium period of two years.