Cabinet approves Emergency Credit Line Guarantee Scheme 5.0 with ₹5,000 crore for airlines
On 5 May 2026 the Union Cabinet approved ECLGS 5.0, targeting additional credit of ₹2,55,000 crore for MSMEs, other businesses and airlines hit by the West Asia situation, including ₹5,000 crore for airlines.
Summary
The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 was approved by the Union Cabinet chaired by PM Narendra Modi on 5 May 2026 to help businesses tide over short-term liquidity stress from the West Asia crisis, targeting additional credit flow of ₹2,55,000 crore, including ₹5,000 crore for airlines facing high ATF prices and airspace closures. The National Credit Guarantee Trustee Company (NCGTC) will give Member Lending Institutions guarantee cover of 100% for MSMEs and 90% for non-MSMEs and airlines, with no guarantee fee. Borrowers with standard accounts as of 31 March 2026 can get up to 20% of peak working capital used in Q4 FY26 (capped at ₹100 crore); airlines can get up to 100%, capped at ₹1,500 crore per borrower. Loans run 5 years with a 1-year moratorium for MSMEs and non-MSMEs, and 7 years with a 2-year moratorium for airlines; the scheme covers loans sanctioned up to 31 March 2027.
Key facts
- Approved
- Union Cabinet, 5 May 2026
- Size
- Additional credit ₹2,55,000 crore incl. ₹5,000 crore for airlines
- Guarantee
- NCGTC: 100% for MSMEs; 90% for non-MSMEs and airlines; nil fee
- Limits
- 20% of peak Q4 FY26 working capital, cap ₹100 crore; airlines up to 100%, cap ₹1,500 crore
- Tenor
- 5 yrs incl. 1-yr moratorium (MSME/non-MSME); 7 yrs incl. 2-yr moratorium (airlines); till 31 Mar 2027
Practice MCQs 3 questions
Under ECLGS 5.0, approved in May 2026, what guarantee coverage does NCGTC provide for MSMEs and for non-MSMEs?
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Correct answer: B — 100% for MSMEs and 90% for non-MSMEs
ECLGS 5.0 provides 100% guarantee cover for MSMEs and 90% for non-MSMEs as well as the airline sector.
How much has been earmarked for airlines under ECLGS 5.0, approved by the Cabinet in May 2026?
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Correct answer: D — ₹5,000 crore
₹5,000 crore of the ₹2,55,000 crore additional credit is earmarked for airlines; ₹1,500 crore is the per-airline cap.
Which entity provides the credit guarantee to Member Lending Institutions under ECLGS 5.0?
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Correct answer: A — National Credit Guarantee Trustee Company (NCGTC)
Guarantee coverage under ECLGS 5.0 is provided to Member Lending Institutions by the National Credit Guarantee Trustee Company Limited (NCGTC).