Banks Sanction Rs 600 bn Under ECLGS 5.0 as MSME Demand Surges

28 Jul 2026 CW Team

Banks have sanctioned more than Rs 600 billion (Rs 600 bn) under the Emergency Credit Line Guarantee Scheme 5.0 during the April–June quarter of FY27 as lenders stepped up support for sectors affected by disruptions linked to the West Asia conflict. Launched in May, the scheme targets stressed sectors including micro, small and medium enterprises, exporters, logistics, manufacturing and aviation. The bulk of guarantees has flowed to MSMEs.

Punjab National Bank emerged as the largest lender in the quarter, disbursing an exact Rs 123.45 billion (Rs 123.45 bn), and said it had been eligible to disburse up to Rs 300 billion and received about 20,000 applications. Canara Bank reported sanctions of roughly Rs 70 bn and indicated scope to disburse up to Rs 200 bn under the programme. The State Bank of India and Bank of Baroda had not disclosed figures but management commentary pointed to healthy demand.

Among private lenders, HDFC Bank sanctioned about Rs 140 bn and Axis Bank disbursed around Rs 100 bn during the quarter, while Kotak Mahindra Bank sanctioned about Rs 30 bn. ICICI Bank and Yes Bank did not disclose their ECLGS 5.0 figures. Bank commentary suggested that public sector banks led the initial rollout, with private lenders also registering strong traction as existing borrowers tapped the government?backed credit line.

Mid-sized lenders also reported healthy uptake: Indian Bank sanctioned about Rs 50 bn, Central Bank of India around Rs 45 bn and Indian Overseas Bank about Rs 26 bn. Among smaller private banks, Federal Bank sanctioned roughly Rs 20 bn, RBL Bank disbursed about Rs 2 bn and Karur Vysya Bank sanctioned close to Rs 750 million (Rs 750 mn). Demand for the scheme appears sustained as lenders process applications and support recovery in affected sectors.

Infrastructure Urban

28 Jul 2026

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