The Union Cabinet on Tuesday greenlit the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, a strategic intervention aimed at bolstering the Indian economy against the ripple effects of the ongoing West Asia crisis.
This latest iteration of the scheme is set to facilitate an additional credit flow of Rs 2.55 lakh crore, focusing on maintaining liquidity, protecting jobs, and ensuring the stability of critical supply chains during this period of global volatility.
Administered through the National Credit Guarantee Trustee Company Ltd (NCGTC), the scheme provides varying levels of security to lenders to encourage the flow of credit. While MSMEs will benefit from a full 100% guarantee cover, non-MSME entities and airlines are eligible for a 90% cover.
To further ease the financial burden on struggling businesses, the government has waived all guarantee fees for loans sanctioned under this version of the scheme.
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General borrowers, including both MSME and non-MSME firms, can access additional credit of up to 20% of their peak working capital, with an individual cap set at Rs 100 crore. These loans carry a five-year tenure, which includes a one-year moratorium on principal payments. Eligibility is strictly limited to borrowers maintaining standard accounts as of March 31, 2026, and the window for sanctions will remain open until March 31, 2027.
A significant portion of the package has been specifically carved out for the aviation industry, with Rs 5,000 crore earmarked for scheduled passenger airlines. Recognising the intense pressure on this sector, the government has allowed airlines to borrow up to Rs 1,500 crore per borrower.
These specific loans offer a more flexible repayment structure, featuring a seven-year tenure and a two-year moratorium to help carriers navigate the unique operational hurdles posed by the current geopolitical climate.
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