Modified ECLGS for Aviation Sector

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The Department of Financial Services (DFS) has modified the ECLGS for the aviation sector, raising the scheme’s cheaper loan limit to ₹1,500 crore from ₹400 crore to help the sector tide over cash-flow problems.


  • As per the modified ECLGS, an airline would be eligible for 100% of its fund- based or non-fund-based loan outstanding or ₹1,500 crore, whichever is lower.
  • The move is aimed at giving the necessary collateral-free liquidity at reasonable interest rates to the aviation industry. Previously, the civil aviation sector were allowed to borrow up to 50% of their highest fund-based credit outstanding, subject to a maximum of ₹400 crore per borrower.
  • ECLGS was announced as part of the Atma Nirbhar Bharat Package in 2020 with the objective to help businesses including MSMEs to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis, by providing Member Lending Institutions (MLIs), 100 percent guarantee against any losses suffered by them due to non-repayment of the ECLGS funding by borrowers. 
  • ECLGS is under the operational domain of Ministry of Finance, Department of Financial Services (DFS).


Source : Mint