Banks Sanction ₹35,000 Crore Under ECLGS for MSMEs and Airlines Hit by West Asia Crisis

 New Delhi: The government on Monday said that banks have sanctioned Rs 35,000 crore loans under the emergency credit line guarantee scheme (ECLGS) to small and medium enterprises and industries impacted by the West Asia conflict.

The scheme, approved by the Union Cabinet on May 5, aimed at providing additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for airlines hit by the ongoing geopolitical crisis.

Lenders have cleared about 80,000 applications with loans amounting to Rs 35,194 crore, and guarantees worth Rs 15,720 crore have been issued as of May 29, Department of Financial Services Joint Secretary Manoj Muttathil Ayyappan told reporters here.

“Since we have reached a good number, it is expected that the customers would benefit from the scheme. The entire process is digital and end-to-end can be completed in 5-7 days. The scheme is made generally liberal, ensuring that maximum beneficiaries are able to avail the benefits. Only customers who are SMA 2 as of March 31, 2026, are kept outside the scheme,” he said.

He also said that the outreach programme is being carried out across the country so that maximum benefit can be provided. The ECLGS 5.0, having an outlay of Rs 18,100 crore, would help airlines and MSMEs impacted by the West Asia crisis.

Passenger airlines would be eligible for up to 100 per cent of peak credit up to Rs 1,500 crore, while institutions can access up to 20 percent of fund-based working capital up to Rs 100 crore. The objective of the scheme is to provide timely liquidity to sustain the businesses and prevent job losses. It will also promote uninterrupted domestic production and maintain the resilience of the ecosystem.