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Under ECLGS, interest rates for loans to Indian airlines are virtually double that of banks: Govt officials

High interest rates puts the viability of the scheme in question, at a time when airlines are struggling to make ends meet due to high ATF prices.

October 21, 2022 / 05:22 PM IST
(Representational image)

(Representational image)

Domestic airlines like IndiGo, Vistara, Air India, GoFirst, and Akasa Air are availing of loans from banks and financial institutions at interest rates lower than what the government's Emergency Credit Line Guarantee Scheme (ECLGS) charges them, senior government officials have said.

"Most airlines, except SpiceJet and GoFirst, have not applied for loans under the ECLG scheme as they are getting better rates from the open market," a senior government official aware of the matter said.

He added that SpiceJet has been loaned around Rs 1,350 crore under the scheme, while GoFirst had received loans of around Rs 100 crore.

Another government official said that banks have released funds to airlines at interest rates of around 8-9 percent under the scheme.