DFS Discusses ECLGS 5.0 Implementation With Industry Associations, FISME Welcomes Initiative

New Delhi, May 27 (KNN) The Department of Financial Services under the Ministry of Finance recently convened a meeting with major industry associations to discuss the implementation, operational guidelines and business opportunities under the newly launched Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
 
The meeting was attended by representatives from leading industry bodies including Federation of Indian Micro and Small & Medium Enterprises (FISME), Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII), ASSOCHAM, etc.
 
The objective of the meeting was to familiarise industry associations with the provisions of ECLGS 5.0 and encourage wider participation in the scheme.
 
Industry Bodies Welcome Expanded Scope Of Scheme
 
Neeraj Kedia, Chairman, Banking & Finance Committee, FISME, welcomed the government’s decision to include non-MSMEs along with MSMEs under the scheme, stating that the move significantly broadens its scope and potential impact. He also appreciated the government's in-person propagation of the scheme.
 
He informed that during the meeting, the government shared details indicating that nearly 1,90,000 registrations had already been received under the scheme, of which around 11,000 applications had been processed so far.
 
He added that the interest rate under the scheme has been capped at 9 percent for loans extended by banks and 14 percent for loans provided by NBFCs.
 
Industry stakeholders also agreed to work jointly with the government to accelerate awareness and implementation of the scheme among eligible businesses.
 
ECLGS 5.0 Targets Additional Credit Flow Of Rs 2.55 Lakh Crore
 
Earlier this month, the Union Cabinet chaired by Narendra Modi approved ECLGS 5.0 to provide additional financial support to businesses affected by disruptions arising from the ongoing West Asia conflict. 
 
The scheme aims to enable additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for airlines. 
 
Under it, National Credit Guarantee Trustee Company Limited will provide guarantee cover to lending institutions for loans extended to eligible borrowers facing liquidity stress, with 100 percent coverage for MSMEs and 90 percent for non-MSMEs and airlines, without any guarantee fee.
 
Eligible entities include MSMEs, non-MSMEs with existing working capital limits and scheduled passenger airlines with standard loan accounts as of March 31, 2026. 
 
MSMEs and non-MSMEs can avail additional credit of up to 20 percent of peak working capital used in Q4 FY26, capped at Rs 100 crore, while airlines can access support up to Rs 1,500 crore.
 
Loans for MSMEs and non-MSMEs will have a five-year tenure with a one-year moratorium, while airline loans will carry a seven-year tenure with a two-year moratorium. The scheme will remain open for sanctions until March 31, 2027.
 
According to the government, ECLGS 5.0 has been designed to help businesses address liquidity challenges, sustain operations, protect employment and maintain supply-chain stability amid continuing geopolitical uncertainty.
 
(KNN Bureau)