Emergency Credit Line Guarantee Scheme (ECLGS-5.0), which aims to provide additional liquidity support to MSMEs in the current challenging economic conditions, should be made simple and industry-friendly for the MSMEs to benefit from it, said Jagadesh Chandran, secretary of the South India Spinners Association.Many MSMEs have reported that even after submitting complete applications, there is no defined timeline for sanction and disbursement. The applications should be accepted or rejected within 15 working days, and banks should provide written reasons in case of delay or rejection.An online tracking mechanism can be introduced to monitor the status of the applications. Since the primary purpose of the scheme is to support industries facing temporary financial difficulties, banks should be advised to give priority to eligible SMA-1 and SMA-2 accounts. Stressed MSMEs that have capability to revive should receive preferential support.The textile and spinning sector faces significant challenges due to fluctuating raw material prices, reduced demand and working capital constraints. Banks should extend special attention to labour-intensive sectors such as textiles. Sector-specific monitoring may be undertaken to ensure adequate credit flow, he said.Further, different banks are adopting different interpretations and documentation requirements, causing confusion among MSMEs. The Reserve Bank of India should ensure uniform implementation of the prescribed guidelines across all lending institutions and a nodal officer should be designated in each bank for ECLGS-related grievances.State-level bankers committee should review every month the bank-wise sanctions, disbursements, pending applications and rejection cases. Existing borrowers with satisfactory track records should be given the ECLGS aid through a simplified approval process without asking for fresh valuation reports and legal opinions.Several member units have reported that banks insist on Memorandum of Deposit of Title Deeds (MODT) before loan disbursement, even though such requirements are not specifically envisaged under the scheme. Hence, banks should be advised to not insist on MODT. Securities available with banks should be considered sufficient for processing eligible applications.Some banks are also said to be insisting on professional balance sheet and additional documentation that are not directly related to the eligibility criteria of the scheme. Documentation requirements should be kept simple and uniform, he added. Published - June 13, 2026 06:09 pm IST