Individual companies can now obtain government-guaranteed supplemental loans
NEW DELHI: Government expanded coverage of recharge based on guarantees on Saturday loans for small companies to include people like dentists, doctors, merchants, and truck and taxi owners who had turned to bank loans.
Eligibility criteria were also relaxed for an additional 20% loan for those with an outstanding line of credit of up to Rs 50 million on February 29, which is double the previous limit, while the annual turnover threshold was raised from Rs 100 million to Rs 250 million.
On Friday, TOI was the first to report on the change in eligibility criteria amid demands to expand the number of entities that can take advantage of special facilities to combat the impact of Covid-19 on their businesses.
“We expect another Rs 1 lakh crore of loans to flow,” said the finance minister. Nirmala Sitharaman he told reporters. In late May, the government had announced the Emergency Credit Line Guarantee Scheme and said that based on a 100% guarantee, it expected around Rs 3 lakh crore of additional funds for small businesses.
So far, penalties are estimated at just under Rs 1.3 lakh crore with more than Rs 87,000 crore disbursed. With expanded coverage, the overall flow of loans could be around Rs 2.6 lakh crore or so, said financial services secretary Debasish Panda.
While the scope of the scheme will now include individual businesses, Sitharaman said no final decision has yet been made on the extension of the individual and home loan moratorium. In recent days, bankers are seeking to end the loan moratorium offered to all buyers, which will end in late August. The FM said the government was in talks with RBI for the restructuring of bank loans, but declined to give further details.
She said there was evidence that the workers were returning to work with industry representatives, suggesting that 40-45% of migrant workers had already returned.
Sitharaman also said that a GST Council meeting will be called soon to find a solution on GST compensation.