State Bank of India (SBI) has emerged as the largest lender under the government’s Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, with Rs 32,750 crore in loans under the latest version of the programme.
Of the total amount sanctioned, Rs 25,440 crore has already been disbursed, SBI Chairman CS Setty said on Friday. “We’re seeing a good lending activity for small and medium firms, and not only that, it is very good, but we also see the banks are very much in need of government-backed credit.
Other major banks such as Punjab National Bank, Union Bank of India and Canara Bank have also extended substantial credit under ECLGS 5.0.
SBI Leads Bank-Wise ECLGS 5.0 Exposure
SBI has the highest disclosed sanction amount among banks under the current ECLGS programme. The bank's Rs 32,750 crore sanction figure is significantly ahead of other lenders.
Punjab National Bank (PNB) has sanctioned Rs 15,856 crore, of which Rs 12,000 crore has been disbursed.
Union Bank of India has sanctioned about Rs 12,000 crore, with Rs 10,000 crore already disbursed.
Canara Bank has sanctioned around Rs 11,000 crore under the scheme, while Bank of Baroda has reported disbursements of approximately Rs 11,000 crore.
Indian Overseas Bank has sanctioned and disbursed around Rs 2,600 crore and is targeting total exposure of Rs 4,500 crore.
Kotak Mahindra Bank has disbursed around Rs 3,000 crore; RBL Bank has disbursed around Rs 200 crore.
Federal Bank has sanctioned and disbursed between Rs 1,800 crore and Rs 2,000 crore under the scheme.
Bank-Wise ECLGS 5.0 Exposure
Bank Sanctioned Disbursed
- SBI 32,750 crore 25,440 crore.
- Punjab National Bank 15,856 crore 12,000 crore.
- Union Bank of India 12,000 crore 10,000 crore.
- Canara Bank 11,000 crore Not disclosed.
- Bank of Baroda Not disclosed.
- Indian Overseas Bank Rs 2,600 crore Rs 2,600 crore.
- Kotak Mahindra Bank Not disclosed Rs 3,000 crore.
- RBL Bank Not disclosed Rs 200 crore.
- Federal Bank Rs 1,800–2,000 crore Rs 1,800–2,000 crore.
HDFC Bank sees opportunity in mid-Corporate Segment
Private-sector lenders are also benefiting from the latest version of the government-backed credit scheme.
HDFC Bank Managing Director and CEO Sashidhar Jagdishan said ECLGS is helping the bank gain market share in the mid-corporate segment. The bank, however, did not disclose the amount it has sanctioned under the scheme.
It suggests that ECLGS 5.0 is not only supporting borrowers but is also affecting banks' corporate lending strategies.
Lenders also have the benefit of a government guarantee to reduce the credit risk of eligible loans and expand relationships with businesses that need more working capital or liquidity support.
What is ECLGS 5.0?
The Emergency Credit Line Guarantee Scheme is a government-backed initiative to provide additional credit to eligible businesses through member lending institutions.
The scheme provides collateral-free guaranteed credit, with the government guarantee covering 100% for MSMEs and 90% for non-MSMEs and airlines, under the applicable framework.
The current version, ECLGS 5.0, is designed to assist businesses in managing short-term liquidity mismatches.
Under the scheme, eligible borrowers in general sectors can get loans of up to Rs 100 crore, whereas the limit for airlines is much higher at Rs 1,500 crore.
The programme is therefore a further source of liquidity for businesses with cash flow pressures.
MSMEs Continue to Account for Majority of Guarantees
The scale of the ECLGS programme remains significant in the long run.
In July, the government said that ECLGS 5.0 had crossed 4.1 lakh guarantees while more than Rs 1.55 lakh crore of loan guarantees had been issued.
MSMEs make up the majority of these guarantees, with about 98% of guarantees benefiting the segment.
That is important because small and medium-sized businesses are usually more fragile to short-term liquidity constraints and, in periods of financial stress, more susceptible to accessing unsecured credit.
As such, government-backed guarantees can contribute to credit availability while reducing the risk exposure of the participating lenders.
Why is ECLGS 5.0 important to banks?
The strong participation of banks in ECLGS 5.0 could have implications for the broader banking sector.
In particular, for public-sector banks, the scheme is a mechanism for expanding lending to eligible businesses and receiving government-backed credit protection. SBI’s leadership in sanctions and disbursements shows the extent to which big banks are involved.
The scheme is also enabling private sector banks to build up their presence in mid-sized corporates.
However, loan growth under a government guarantee programme must be assessed along with asset quality, pricing and the overall risk-adjusted return generated by the lending.
SBI emerges as a key ECLGS lender
With Rs 32,750 crore sanctioned and Rs 25,440 crore disbursed, SBI is currently the largest disclosed lender under ECLGS 5.0 among the banks listed.
PNB and Union Bank are the next largest disclosed participants, while Canara Bank and Bank of Baroda have also reported substantial exposure.
The latest figures are a sign that the government-backed credit programmes are still of critical importance for business liquidity and for expanding formal credit access.
As ECLGS 5.0 goes on, lending activities, guarantee issuance and borrower demand will continue to be important indicators for assessing the programme’s impact on India’s banking sector and the broader economy.
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