New Delhi: Banks have sanctioned loans worth more than Rs 35,000 crore under the latest version of the Emergency Credit Line Guarantee Scheme (ECLGS),
aimed at supporting businesses affected by the continuing geopolitical tensions in West Asia.
Speaking to reporters, Department of Financial Services Joint Secretary Manoj Muttathil Ayyappan said lenders had approved nearly 80,000 loan applications under the scheme by May 29. The total amount sanctioned stood at Rs 35,194 crore, while guarantees worth Rs 15,720 crore had been issued, PTI reported.
Faster access to credit
Ayyappan said the application process has been fully digitised, allowing eligible borrowers to complete the process within five to seven days. He added that the scheme has been designed with flexible eligibility norms to ensure wider participation, with only borrowers classified as SMA-2 as of March 31, 2026, excluded from its benefits.
The government is also conducting outreach programmes across the country to improve awareness and maximise coverage among eligible businesses.
Support for MSMEs and airlines
Approved by the Union Cabinet on May 5, ECLGS 5.0 seeks to facilitate additional credit flow of Rs 2.55 lakh crore. The package includes a dedicated Rs 5,000 crore window for airlines impacted by the ongoing crisis.
Under the scheme, passenger airlines can avail loans of up to 100% of their peak credit exposure, subject to a ceiling of Rs 1,500 crore. Other eligible institutions can access additional credit equivalent to 20% of their fund-based working capital, capped at Rs 100 crore.
The objective is to ensure timely liquidity support, help businesses maintain operations, protect jobs and minimise disruptions to domestic production.
Credit guarantee coverage
Banks can extend additional credit of up to 20% over existing working capital limits. The scheme also offers a government-backed guarantee through the National Credit Guarantee Trustee Company Limited (NCGTC), covering 100% of eligible MSME loans and 90% of loans extended to non-MSME borrowers.
MSMEs and airlines have been facing financial pressure since the West Asia conflict began in February. The ECLGS programme was originally introduced in May 2020 to support businesses affected by the Covid-19 pandemic.
