Mumbai : The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide financial relief to businesses impacted by the ongoing West Asia crisis.
Under the scheme, the government will offer credit guarantee support through the National Credit Guarantee Trustee Company Limited (NCGTC) to banks and financial institutions, enabling them to extend additional loans to eligible borrowers. The scheme aims to generate an additional credit flow of RS 2.55 lakh crore, including RS 5,000 crore for the airline sector.
The scheme will cover MSMEs, non-MSMEs, and scheduled passenger airlines that have standard loan accounts as of March 31, 2026. It provides 100% guarantee coverage for MSMEs and 90% coverage for non-MSMEs and airlines, with no guarantee fee.
Eligible businesses can avail additional credit of up to 20% of their peak working capital utilised in the fourth quarter of FY26, capped at RS 100 crore. For airlines, the limit is up to RS 1,500 crore per borrower, subject to conditions.
The loan tenure is set at 5 years (including a 1-year moratorium) for MSMEs and non-MSMEs, and 7 years (including a 2-year moratorium) for airlines. The scheme will remain in force for loans sanctioned up to March 31, 2027.
The government expects the scheme to help businesses manage short-term liquidity challenges, maintain operations, safeguard jobs, and ensure stability in supply chains during the ongoing global uncertainty.
