Banking and RBI
ECLGS 5.0: guarantee cover up to 100% for MSMEs, 90% for non-MSMEs and airlines; Rs 2.55 lakh crore cap
A PIB explainer of 28 May 2026 says the Union Cabinet has approved ECLGS 5.0 to relieve MSME units and the aviation sector from pressures such as higher ATF prices, airspace restrictions and operational challenges. NCGTC will give credit guarantee cover of up to 100 per cent for MSME units and up to 90 per cent for non-MSME and airline borrowers to Member Lending Institutions.
Additional loans of up to 20 per cent of peak working capital utilisation in Q4 of 2025-26, capped at Rs 100 crore, may be given. The guarantee is co-terminus with loan tenure, and the scheme applies to loans sanctioned till 31 March 2027 or until guarantees of Rs 2.55 lakh crore are issued, whichever is earlier. Eligible MSME units pay no additional guarantee fee.
- Scheme: Emergency Credit Line Guarantee Scheme (ECLGS 5.0)
- Cover: up to 100% for MSMEs; up to 90% for non-MSME and airlines
- Extra loan: up to 20% of peak working capital, max Rs 100 crore
- Limit: till 31 March 2027 or Rs 2.55 lakh crore of guarantees, whichever is earlier
Exam takeaway: NCGTC is the trustee company that provides the credit guarantee under ECLGS.
Quick revision: ECLGS 5.0: cover 100% MSME, 90% others; cap Rs 2.55 lakh crore; till 31 Mar 2027 (PIB, 28 May).
Press Information Bureau original source