Banks have space to disburse another Rs 46,000 crore under a government-backed lending programme, even as the scope was enhanced to include the aviation sector and medical institutions under the plan.

Of the total kitty of Rs 3 lakh crore available under the emergency credit line guarantee scheme (ECLGS), Rs 2.54 lakh crore of loans have already been covered, said Indian Banks’ Association (IBA) chief executive officer Sunil Mehta.

While Rs 2.54 crore has been sanctioned, Rs 2.40 lakh crore of this has already been disbursed, Mehta added, while addressing a press conference jointly with State Bank of India chairman Dinesh Khara and IBA chairman and Union Bank of India CEO Rajkiran Rai.

ECLGS was launched in 2020 with a corpus of Rs 3 lakh crore to give financial support to the micro, small and medium enterprises (MSMEs). This was extended to all health care business loans for setting up of onsite oxygen generation plants with interest rate capped at 7.5%. ECLGS 4 was introduced on Sunday making changes to ECLGS 1 and 3 schemes.

“The modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in seamless resumption of business activity," the finance ministry said in a statement.

The government also extended the validity of the ECLGS schemes till 30 September, or till the corpus is exhausted. Disbursements are to be permitted up to 31 December 2021.

Of the Rs 3 lakh crore allotted with government guarantee, Rs 2.54 lakh crore is already sanctioned. It is only the remaining 46,000 crore which will be available for the ECLGS 4.0 scheme.

The ministry said, under the ECLGS 4.0, a 100% guarantee cover to loans up to Rs 2 crore will be provided to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants.

“There is no amount (target) shared by the finance ministry, but each bank will probably assess," said Khara. For SBI, the quantum will be around Rs 2,000 crore, he added.

“The above schemes are being offered by public sector banks (PSBs) at concessional interest rates and will form part of the Covid-specific loan book,” said Rai.

Outside this scheme, the government has also asked banks to give personal loans to individuals to meet their Covid-care expenses at concessional rates. This will be decided individually by each PSB.

“State Bank of India will give unsecured personal loans for Covid-19 treatment at 8.5%. The loan size will range between Rs 25,000 to Rs 5 lakh,” said Khara.

To provide support to small businesses hit by the second coronavirus wave, banks have initiated the process of restructuring of loans up to Rs 25 crore. This is in line with the Covid-19 relief measures announced by the RBI earlier this month.

Khara said for the resolution framework 2.0 announced by the RBI on 5 May, all PSBs have come out with a formulated templated approach for restructuring of loans to individuals, small businesses, MSMEs up to Rs 25 crore.