Up to 75% of exposures guaranteed in ECLGS 5.0 to have 0% risk weight
RBI
This story was originally published at 21:35 IST on 16 June 2026
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NEW DELHI – The Reserve Bank of India Tuesday said exposures guaranteed under the Emergency Credit Line Guarantee Scheme 5.0 will have a risk weight of 0% to the extent of 75% of the guaranteed portion. The remaining exposure will attract a risk weight of 20% as per the extant guidelines.
Exposures guaranteed under the Emergency Credit Line Guarantee Scheme 5.0 will attract a risk weight of 0% to the extent of 75% of the guaranteed portion, that is, to the extent of the guaranteed portion wherein the settlement amount is expected to be received within 30 days from the date of invocation, the RBI said in a notification.
In May, the Cabinet approved INR 181 billion for the scheme to extend credit support to Indian businesses amid uncertainties related to the war in West Asia. The scheme will help businesses, especially MSMEs and the airline sector, maintain their operations, protect jobs, and sustain supply chains. The scheme aims to infuse an additional credit flow of INR 2.55 trillion.
The scheme will apply to all loans sanctioned till the end of 2026–27 (Apr-Mar) to help borrowers tide over any short-term liquidity mismatches in view of the war in West Asia. Under the scheme, additional credit of up to 20% of peak working capital utilised during Jan-Mar, up to a limit of INR 1 billion, is provided as support. For airlines, a credit of up to 100% of working capital, subject to a cap of INR 15 billion per borrower.
The credit guarantee issued under the newly launched Emergency Credit Line Guarantee Scheme 5.0 has touched INR 484.84 billion as on Jun. 9, the finance ministry said last week. "Out of the total coverage, 86% of the total guaranteed amount belongs to the MSME (micro, small, and medium enterprises) sector," the ministry had said. End
Reported by Shubham Rana
Edited by Saji George Titus
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