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90% of first ECLGS amount disbursed so far: Report

On Monday, the government expanded the emergency credit line guarantee scheme (ECLGS) by another Rs 1.5 lakh crore, which Crisil feels will help alleviate the potential stress on asset quality of banks arising from the second wave of the pandemic.

June 29, 2021 / 06:46 PM IST
Representative image

Representative image

Banks have so far lent 90 per cent of the Rs 3 lakh crore under emergency credit line guarantee scheme announced last year to help small businesses tide over the pandemic, according to a report by Crisil.

On Monday, the government expanded the emergency credit line guarantee scheme (ECLGS) by another Rs 1.5 lakh crore, which Crisil feels will help alleviate the potential stress on asset quality of banks arising from the second wave of the pandemic.

Finance Minister Nirmala Sitharaman expands ECLGS scheme by Rs 1.5 lakh crore

Disbursements under the existing ECLGS have already reached Rs 2.69 lakh crore of the total corpus of Rs 3 lakh crore, which is 89.7 per cent, benefiting almost 10 per cent of the value of banking sector advances and over 60 per cent value of advances to micro, small and medium enterprises, Crisil said in a note on Tuesday.

This, coupled with other steps like loan moratorium and loan resolution framework, has helped contain banks' gross non-performing assets at 7.5 per cent in March 2021, down from 8.2 per cent in March 2020, the agency said. Even micro, small and medium businesses, which bore the brunt of the pandemic on their cash flows saw gross NPAs increase by only less than 100 basis points, it noted.

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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On the Rs 7,500 crore credit guarantee scheme announced for loans given to micro finance institutions for on-lending, Crisil said it will enhance funding access for the microlenders, and also ensure increased credit flow to their small borrowers as they were unable to borrow from other avenues in the formal financial ecosystem. Expanding ECLGS by Rs 1.5 lakh crore will provide the much-needed support to vulnerable segments of the economy, particularly small and mid-sized companies, to tide over the current crisis.
PTI
first published: Jun 29, 2021 06:46 pm
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