The surge in the number of Covid cases due to the second wave, the lockdown being implemented in the major cities and the shortage of oxygen being faced in the major hospitals have led the government to introduce a new credit scheme for the hospitals across the country. Let’s look at the new credit scheme offered to the hospitals and how to they can avail it.
Govt Credit Scheme for Hospitals in India
The Government of India has announced a new credit scheme for the hospitals across India. This is a step taken by the government in order to push the economy and also can be considered as a step to invest more into the infrastructure in the country.
They have extended the Emergency Credit Line Guarantee Scheme (ECLGS) and under the Emergency Credit Line Guarantee Scheme 4.0, the hospitals will get a concessional credit facility of up to INR 2 crore in loans which is a 100% guaranteed government loan in order to set up oxygen generation plants.
The government of India on 30 May 2021, had announced the Emergency Credit Line Guarantee Scheme 4.0 and expanded the scope of the scheme in order to cover up the economic disruptions in the country.
The 100% guaranteed loan cover of up to INR 2 crores under the ECLGS 4.0 scheme will not only cover the hospitals but also the nursing homes, clinics and medical colleges in order to set up an on-site oxygen generation plant. The interest rate that is charged for the loans that are provided under the ECLGS 4.0 scheme is 7.5%.
What is Emergency Credit Line Guarantee Scheme?
Emergency Credit Line Guarantee Scheme is a scheme under the Government of India which guaranteed a 100% guarantee under the National Credit Guarantee Trustee Company for the loans that are provided by the Member Lending Institutions. As of now the Member Lending Institutions for the ECLGS 4.0 are the public sector banks of the country.
How Hospitals can avail the Govt Credit Scheme?
The public sector banks in the country had simultaneously announced that they were going to join hands with the RBI and the Emergency Credit Line Guarantee Scheme (ECLGS) in order to provide the standardized loans for the healthcare institutions under the ECLGS 4.0 scheme in order to set up oxygen generation plants.
Public Sector banks have also announced that they will offer up to 100 crores at a concessional rate for hospitals, clinics, healthcare institutions, diagnostic centres and pathology labs in order to set up or expand various healthcare facilities.
As of now the healthcare institutions that are eligible for the Emergency Credit Line Guarantee Scheme 4.0 will be able to avail the loan by approaching various Public Sector banks across the country.
Since the loan provided by the Public Sector Banks are a fully guaranteed by the government for the credit losses the hospitals, clinics, medical colleges or any other healthcare institution will not have to provide any collateral to avail the loan for setting up the oxygen generation plant.
About ECLGS 4.0
Dinesh Khara who is the chairman of SBI has conveyed that the initiatives that were taken by all the Public Sector Banks by coming together to provide the loan is considered to be a significant step in the right direction to improve from the financial crisis faced due to the Covid surge on the affected segments.
Uday Shankar who is FICCI president has raised that there is a need to increase the limit of INR 3 lakh crore. He added that the new scheme ECLGS 4.0 will support the healthcare sector through financial channels and said that he hopes the banks would go all out in providing the loans in a timely and a quick manner.
He conveyed that this scheme would have further helped if the allocation would have been made higher and FICCI has requested to double the amount to 6 lakh crores.
The public sector banks have also taken steps to provide lending support by designing three different products for pathology labs, vaccine manufacturers, hospitals and dispensaries, manufacturers and suppliers of oxygen, importers of vaccines and various Covid related drug logistics firms, ventilators and patients for treatment.
What is Governments Emergency Credit Line Guarantee Scheme?
In the Credit Line Guarantee Scheme provided by Government, hospitals will get a concessional credit facility of up to INR 2 crore in loans which is a 100% guaranteed government loan in order to set up oxygen generation plants.
What is the interest rate on the loan provided by the Government?
The interest rate that is charged for the loans that are provided under the ECLGS 4.0 scheme is 7.5%.
Till When the Emergency Credit Line Guarantee Scheme will be valid?
The Emergency Credit Line Guarantee Scheme will be valid till September 2021.
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