Banks sanctions ₹35,000 crore ECLGS loans to MSMEs & industries hit by West Asia Crisis

Department of Financial Services Joint Secretary Manoj Muttathil Ayyappan has said that banks have sanctioned loans worth more than ₹35,000 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 for micro, small and medium enterprises (MSMEs), airlines and other businesses impacted by the ongoing crisis in West Asia.

He said the latest version of the scheme, approved by the Union Cabinet on May 5, aims to facilitate additional credit flow of ₹2.55 lakh crore, including ₹5,000 crore earmarked for airlines impacted by the ongoing geopolitical crisis. Lenders have approved around 80,000 applications involving loans worth ₹35,194 crore, while guarantees amounting to ₹15,720 crore have been issued as of May 29, 2026.

He further said ‘since we have reached a good number, it is expected that the customers would benefit from the scheme and the entire process is digital and end-to-end can be completed in 5-7 days.’ He noted that the scheme is made generally liberal, ensuring that maximum beneficiaries are able to avail the benefits.

He said only customers who are Special Mention Account (SMA)-2 as of March 31, 2026, are kept outside the scheme. He added that the government is also conducting outreach programmes across the country so that maximum benefit can be provided.