The Union Cabinet approved Emergency Credit Line Guarantee Scheme 5.0 on May 5, 2026. Implemented by NCGTC under the Department of Financial Services.
⚠️ Hard stop: the scheme closes when its ₹2,55,000 crore corpus is exhausted — not necessarily on March 31, 2027. ECLGS 1.0–4.0 burned through ₹3.73 lakh crore across 1.19 crore borrowers before closing in March 2023. This window moves fast.
What it is
Not a new loan. A top-up on your existing working capital facility.
NCGTC provides a credit guarantee to the lending institution:
- 100% coverage for MSME borrowers
- 90% coverage for non-MSMEs and airlines
Because the guarantee replaces collateral, you do not need to offer any additional security.
Are you eligible?
Four conditions. All must be true.
✔ Existing working capital facility with an MLI as of March 31 2026
✔ Account classified "Standard" as of March 31 2026 (not NPA, not SMA-2)
✔ Not already covered under CGSE for the same limit
✔ Not in an NCGTC-excluded sector (see Annexure-A)
SMA-2 means overdue above 60 days — that disqualifies you. SMA-0 and SMA-1 may still qualify. Verify with your bank.
Eligible borrower types:
- MSMEs (manufacturing + service, meeting MSME definition)
- Non-MSMEs with existing working capital limits
- Scheduled passenger airlines
How much can you borrow?
Additional credit = 20% × peak working capital utilisation in Q4 FY26
(Jan 1 – Mar 31, 2026)
Cap for MSMEs/non-MSMEs = ₹100 crore
Example
Peak CC/OD utilisation in Q4 FY26 : ₹12 crore
ECLGS 5.0 entitlement : ₹2.4 crore (20% × 12)
Airlines get a different formula: up to 100% of peak total credit outstanding in Q4 FY26, capped at ₹1,500 crore per airline.
Interest rate caps
| Lender type | Cap |
|---|---|
| Banks + Financial Institutions (MSMEs) | EBLR + 0.75% |
| NBFCs | 13% p.a. |
| Airlines | Board-approved policy of lender |
Guarantee fee: nil. Previous ECLGS versions passed a guarantee fee on to borrowers. ECLGS 5.0 removes it — the cost sits with the Government of India.
Tenure and moratorium
| Borrower | Tenure | Moratorium |
|---|---|---|
| MSMEs + non-MSMEs | 5 years | 1 year on principal |
| Airlines | 7 years | 2 years on principal |
Guarantee cover is co-terminus with loan tenure — it does not expire mid-loan.
Airlines can also convert up to 50% of unpaid interest into a Funded Interest Term Loan (FITL), structuring that interest into a separate repayment schedule.
How the guarantee claim works
Bank sanctions loan
→ Nodal officer registers on app.eclgs.com
→ NCGTC issues Guarantee Certificate
→ Borrower defaults post-moratorium
→ Account classified NPA
→ Bank initiates recovery
→ After lock-in (~6 months post-NPA): bank files claim
→ NCGTC pays out 100% (MSME) or 90% (others)
Who can lend under this scheme?
Member Lending Institutions (MLIs):
- Scheduled Commercial Banks — public and private
- Scheduled Urban Co-operative Banks
- Financial Institutions
- RBI-registered NBFCs
Contact your existing relationship manager. You cannot initiate this through a new lender.
Scheme timeline
| Parameter | Detail |
|---|---|
| Open from | May 5, 2026 |
| Closes | March 31, 2027 or corpus exhaustion — whichever is first |
| Total corpus | ₹2,55,000 crore |
| Aviation earmark | ₹5,000 crore |
What this does not cover
- No existing credit relationship with an MLI as of March 31, 2026
- NPA or SMA-2 accounts as of March 31, 2026
- NCGTC Annexure-A excluded sectors
- Borrowers already fully covered under CGSE
- First-time credit applicants — this is a top-up, not a new facility
Checklist before you call your bank
[ ] Pull CC/OD/WCDL statements for Jan–Mar 2026
[ ] Identify highest outstanding balance in that period
[ ] Calculate 20% of that figure — your ECLGS 5.0 ceiling
[ ] Confirm account was Standard on March 31 2026
[ ] Ask relationship manager specifically for "ECLGS 5.0"
[ ] Bank's nodal officer handles NCGTC registration on backend
Full scheme details, MLI list, and sector exclusions: NCGTC ECLGS 5.0 scheme page
All figures from the Union Cabinet press release of May 5, 2026 and NCGTC operational guidelines. Verify current terms with your lender.
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