One in each six loans disbursed under the emergency credit line guarantee scheme (eclg scheme) released for the during the covid-19 pandemic has grew to become horrific in the last 27 months. Most of the people of these loans are lower than rs 20 lakh, a reporet by indian express stated.
The national credit guarantee trustee company ltd (ncgtc) declared that 1.6 million debts or 16.4 percent of the whole 9.8 million loans dispensed have turned into non-performing assets (npas), the report stated. Ncgtc was set up to control those loans.
In may also 2020, the government introduced the eclg scheme. A two-year moratorium turned into allowed for the loans under eclg. For nbfcs, the interest price was capped at 14 percent. The interest charge for other entities turned into constant at 9.25 percent. If they remained unpaid after the moratorium, the loans were to be declared as npas.
But, ie quoted a banker as announcing that if one loan account of a purchaser turns horrific, all of the loans of the account holder are declared as npa
Loans under the eclg scheme are assured through the authorities and 75 per cent of the mortgage amount is paid to the financial institution by way of the government without delay if the bills turn out to be npas. If the cash is not recovered, the authorities will pay the 25 percent to the bank.
A report by the State Bank of India (SBI) released in January said that the ECLGS was crucial to keep MSMEs afloat.