Emergency Credit Line Guarantee Scheme (ECLGS) modification is made to tailor suit Reserve Bank of India’s (RBI) May 5 announcements, said Rajkiran Rai G, MD & CEO of Union Bank of India and chairman of Indian Banks’ Association (IBA).

The government and the Indian Banks’ Association (IBA) together have now extended the scope of the ECLGS to include lending to the healthcare and aviation sectors.

Speaking in an interview with CNBC-TV18, Rai said, "What ECLGS’ 1.0 modification does is in addition to the restructuring that is allowed by the Reserve Bank of India, it is allowing another 10 percent top-up loan and that will help. I think that will help micro, small and medium enterprises (MSMEs) not only to shift their liabilities matching with the lockdowns and other issues and also give a top-up loan of another 10 percent."

"ECLGS’ 1.0 modification which has come in is applicable for borrowers who are eligible for restructuring under May 5 guidelines of RBI – that’s outstanding up to Rs 25 crore. People who have not restructured can use 30 percent and go for restructuring and people who have restructured already – have two windows of restructuring; one, if their moratorium is less than 24 months what’s given in the first instance, they can go up to 24 months. They can reassess the working capital – that's the leeway given by the RBI. So these two things are available,” he said.

For the entire interview, watch the video

(Edited by : Priyanka Rathi)