SBI to disburse loans worth ₹80,000 crore; funds to reach 1.10 crore accounts, backed by a government guarantee..

State Bank of India (SBI) is preparing to disburse loans amounting to approximately ₹70,000 crore to ₹80,000 crore. SBI has taken this decision under the government's Emergency Credit Line Guarantee Scheme (ECLGS). Providing details on the matter, SBI Chairman C.S. Setty stated that the banking sector expects this scheme to be fully operational within the next 8 to 10 days. He clarified that the scheme is available to everyone, and participation in it will be entirely optional. The bank is collaborating with various MSME organizations to implement this scheme, ensuring that small businesses can access credit with ease.

According to a report by *The Economic Times*, SBI Chairman C.S. Setty reiterated that the scheme is open to all, and opting into it remains entirely at the discretion of the borrower. He expressed optimism that all technical and procedural hurdles associated with the scheme would be resolved within the next 8 to 10 days. According to C.S. Setty, SBI could provide loans ranging from approximately ₹70,000 crore to ₹80,000 crore through this scheme.

**Loans Up to ₹2.55 Lakh Crore**

Just this Wednesday, the Union Cabinet approved ECLGS 5.0, aimed at providing relief to the MSME and aviation sectors. The government states that this scheme will enable eligible businesses to access additional credit amounting to approximately ₹2.55 lakh crore. This includes a special assistance component of ₹5,000 crore specifically for airline companies, designed to provide relief to those grappling with liquidity crises.

**Loans Equivalent to Full Working Capital for Airlines**

Under this scheme, MSME entities will be eligible to receive additional credit of up to 20% of their maximum utilized working capital as of March 2026. The maximum limit for MSMEs has been capped at ₹100 crore. Conversely, airline companies will be eligible to receive loans equivalent to their entire working capital requirements, subject to a maximum limit of ₹1,500 crore per borrower. However, fulfilling certain stipulated conditions will be mandatory for this. For the MSME sector, the tenure of this loan will be 5 years, with a moratorium on installment repayments for the initial one year. Meanwhile, for the airline sector, the loan tenure has been fixed at 7 years, which includes a moratorium period of 2 years. The government has clarified that sectors unaffected by the West Asia crisis—such as education, defense, horticulture, power, and the sugar industry—have not been included in this scheme.

**Assistance for Businesses**

The objective of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 is to provide relief to businesses from the economic challenges arising from the ongoing tensions in West Asia and the Iran crisis. Through this scheme, additional working capital will be made available to the MSME and airline sectors.

The government believes that timely liquidity support will assist businesses in safeguarding jobs, maintaining supply chains, and sustaining production. This additional credit, channeled through banks and financial institutions, will provide robust support to Indian businesses and play a pivotal role in maintaining the stability of the entire business ecosystem.

**Benefits for 1.1 Crore MSME Accounts**

Financial Services Secretary M. Nagaraju stated that the government has taken this step as a precautionary measure to ensure that the MSME sector does not face any major adverse impact. He emphasized that such a robust scheme was essential to provide support to small businesses. According to SBI Research, the ECLGS 5.0 scheme is expected to benefit approximately 1.1 crore MSME accounts. This constitutes roughly 45% of the total MSME portfolio. The report notes that each eligible account could receive additional credit averaging between ₹2 lakh and ₹2.3 lakh.

According to the report, while it is premature to comment on the ultimate outcomes of the scheme, this timely intervention will aid businesses by providing liquidity support, preserving jobs, strengthening supply chains, and maintaining the stability of the Indian economy.

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