The Union Cabinet is expected to soon take a call on the credit guarantee scheme to support various sectors affected by the West Asia war. The scheme, a version of the Emergency Credit Line Guarantee Scheme (ECLGS), is expected to cover loans worth `2.5 lakh crore and would be valid for four years, a senior government official has said. Further, it is likely to provide a 90% credit guarantee for loans from the National Credit Guarantee Trustee Company (NCGTC). The fund will cover the loss in the event of the borrower’s default. The effort is to extend support across sectors, including aviation, MSMEs and even other businesses that are currently facing liquidity pressures. An official specifically highlighted the aviation sector, which is facing disruptions in routes, costs and operations. He also highlighted the success of the ECLGS scheme, as per a report.
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