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FHRAI requests FM to notify the INR60,000 crore Loan Guarantee Scheme

Wednesday, August 11, 2021, 18:00 Hrs  [IST]
HBI Staff | Hyderabad

Federation of Hotel & Restaurant Associations of India (FHRAI) has submitted a representation to the  Finance Minister, Nirmala Sitharaman requesting her intervention for notifying the INR 60,000/- crore sanctioned under the Loan Guarantee Scheme for COVID affected sectors. The announcement was made by the FM in a Press Meet held on 28th June 2021. FHRAI has expressed disappointment about the fact that over a month has passed since announcing the scheme but it has not yet been notified by the Finance Ministry. The Association has stated that neither the Operational Guidelines nor any other details of the scheme have been announced by the Ministry so far. It has also pointed out that whereas, the Loan Guarantee Scheme introduced simultaneously for the Health Sector has been notified and necessary guidelines have been introduced by NCGTC.

 

“The Hospitality sector is one of the worst affected sectors by the pandemic. But the Government’s negligence really compels us to doubt the seriousness in its approach towards the industry’s hardships. The hospitality industry has faced severest restrictions and lockdowns, protocols and suffered maximum losses during the last sixteen months due to COVID-19. The unprecedented second wave has caused a strong ripple effect that has destroyed the entire hospitality eco-system in the country. It will take many years for the industry to recover from the damage. We therefore request the Hon’ble FM to kindly notify the INR.60,000 crore Loan Guarantee Scheme with 100 per cent Government guarantee and long-term repayment options with immediate effect as an effective measure to address the colossal damage suffered by the tourism and hospitality sector in the country,” says Gurbaxish Singh Kohli, Vice President, FHRAI.

 

The FHRAI has also submitted the industry’s grievance about many of its members from different parts of the country having reported that the banks and financial institutions are not processing the applications submitted for loans under ECLGS 3.0 and the applications for loan restructuring.

 

“Such conduct of the financial institutions defeats the very purpose of the flagship initiatives launched by the Government to provide relief to the beleaguered MSMEs. The banks and NBFCs are taking advantage of the ceiling limit fixed by the RBI and are not ready to extend any concession to the MSMEs which are in deep distress. They are unmindful of the fact that the loans under ECLGS are completely guaranteed by the Finance Ministry and the banks or NBFCs have nothing to lose if they provide the loans at concessional rate of interest to the customers. We urge the Hon’ble FM to urgently intervene to provide relief to the highly beleaguered MSMEs by providing loans at concessional rate of interest,” concludes Kohli.

 

 
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