Union Cabinet approves Emergency Credit Line Guarantee Scheme 5.0, with support for airlines

The union cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, under which airlines will be eligible for credit guarantees of up to 100 per cent, with a cap of Rs 15 billion per borrower. The scheme allows airlines to access loans with a tenor of seven years, including a two-year moratorium period on repayment. The guarantee cover will remain in place for the entire duration of the loan, ensuring lenders are fully protected against defaults within the agreed tenor. The credit guarantees will be extended to member lending institutions through National Credit Guarantee Trustee Company Limited (NCGTC), which will cover the guaranteed portion of loans in case of borrower default. ECLGS 5.0 will apply to all eligible loans sanctioned from the date of issuance of NCGTC’s operational guidelines until March 31, 2027. The scheme is expected to help maintain operations, sustain supply chains and cater to additional working capital needs.