SBI may extend up to Rs 80,000 crore loans under ECLGS 5.0 scheme: Setty

New Delhi: State Bank of India (SBI) may extend up to Rs 80,000 crore of loans under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 scheme announced by the government, its Chairman C S Setty said on Thursday.

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"Eligible customer base is known to us, because now the guidelines have come on who's eligible, who's not eligible. The number ranges from Rs 70,000-80,000 crore worth of credit facility is available to our customers under the ECLGS scheme," Setty told reporters here.

The Union Cabinet on Tuesday approved ECLGS 5.0 with an overall outlay of Rs 2.55 lakh crore to provide additional working capital support to businesses affected by the ongoing geopolitical tensions in West Asia.

Under the scheme, airlines have been separately allocated Rs 5,000 crore, while the remaining amount will be available to MSMEs and non-MSME borrowers impacted by the crisis.

Setty said the impact of the West Asia conflict has been more broad-based with second-order impacts visible across industries.

"I'm very happy that this ECLGS 5.0 is a kind of proactive measure. It's not that everyone probably would be taking it, but it is available technically," he said.

Setty said banks expect most operational issues related to the scheme rollout to be resolved within the next 8-10 days, including board approvals and implementation of digital processes through the Jan Samarth portal.

Referring to an SBI assessment, he said over 1.1 crore beneficiaries across the banking system could potentially benefit from the scheme.

The SBI chairman also highlighted the performance of earlier ECLGS versions launched during the Covid-19 pandemic, saying the default rate under the scheme was lower than the average MSME default rate.

M Nagaraju, Secretary of Department of Financial Services, said the overall scheme size was determined based on banks' existing exposure and expected demand from affected sectors.

The senior FinMin official said the tenure for loans under the latest version has been extended to five years from four years earlier, while airlines have been given a repayment period of seven years considering the sector's longer recovery cycle.

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Nagaraju added that all MSMEs are eligible under the scheme, while some non-MSME sectors such as power, telecom, sugar and educational institutions have been excluded because they were assessed to be relatively insulated from the impact of the West Asia crisis.

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