With reference to Emergency Credit Line Guarantee Scheme ECLGS consider the following statements All...........

Economic Affairs Types of Banks and Banking

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With reference to Emergency Credit Line Guarantee Scheme (ECLGS), consider the following statements

All Scheduled Commercial Banks are eligible as Member Lending Institutions (MLIs) under the scheme.
No additional collateral is asked for by lending institutions for credit extended under the scheme.

Select the correct statement.

1 only

2 only

Both

None

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Explanation:

The Emergency Credit Line Guarantee Scheme (ECLGS) is a specific response to the unprecedented situation COVID-19. It seeks to provide much needed relief to the MSME sector by incentivizing Member Lending Institutions (MLIs) to provide additional credit of up to Rs. 3 lakh crores at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.

All Scheduled Commercial Banks are eligible as MLIs. NBFCs which have been in operation for at least 2 years and d Financial Institutions (FIs) will also be eligible as MLIs under the Scheme.
The entire funding provided under the scheme shall be provided with a 100% credit guarantee coverage by National Credit Guarantee Trustee Company (NCGTC) under the Scheme. No additional collateral shall be asked by MLIs for additional credit extended under GECL.

Why in news?

In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the Government has now extended the scope of ECLGS through introduction of ECLGS 3.0 to cover business enterprises in Hospitality, Travel & Tourism, Leisure & Sporting sectors.

Hence both statements are correct.