In a significant boost to India's export sector, lenders have approved financial assistance worth Rs 3,361.83 crore for 774 applicants within the first month of the Rs 20,000-crore Credit Guarantee Scheme for Exporters (CGSE). This rapid uptake underscores the scheme's critical role in supporting exporters, particularly Micro, Small, and Medium Enterprises (MSMEs), navigating challenges like steep US tariffs.
Strong Initial Response to the Export Credit Scheme
Official data from the Department of Financial Services (DFS) reveals a robust pipeline for the scheme. As of January 2, 2026, financial institutions received a total of 1,840 applications seeking credit worth Rs 8,764.81 crore. Of these, approvals for Rs 3,361.83 crore across 774 applications have already been sanctioned. The CGSE, which was approved by the Union Cabinet on November 12 and became operational from December 1, 2025, offers a 100% credit guarantee cover through the National Credit Guarantee Trustee Company Ltd (NCGTC).
This guarantee is provided to member lending institutions (MLIs) to encourage them to extend additional credit facilities of up to Rs 20,000 crore to eligible exporters. The scheme is a strategic intervention by the government to empower Indian exporters during a period of external trade uncertainties, aiding them in market diversification and enhancing global competitiveness. The CGSE will remain in effect until March 31, 2026, or until the full guarantee amount of Rs 20,000 crore is issued, whichever comes first.
Parallel Progress in MSME and Banking Sector
The DFS also provided an update on the related Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME). This initiative incentivizes lenders to provide additional credit of up to Rs 100 crore to MSME borrowers specifically for purchasing plant, machinery, and equipment. By December 2025Rs 16,836 crore against a staggering 8.96 lakh applications under this scheme.
Sharing a broader snapshot of the banking sector's health, the DFS reported record-breaking profits. Scheduled Commercial Banks (SCBs) achieved their highest-ever aggregate net profit of Rs 4.01 lakh crore. Public Sector Banks (PSBs) mirrored this strength, posting a record aggregate net profit of Rs 1.78 lakh crore in the fiscal year 2024-25. Their performance remained robust in the first half of 2025-26, with a net profit of Rs 0.94 lakh crore.
Improved Financial Health of Public Sector Banks
The data further highlights a remarkable turnaround in the asset quality and financial stability of PSBs over the past decade:
- Deposits and Advances: Global deposits of PSBs surged to Rs 146.27 lakh crore in September 2025, from Rs 71.95 lakh crore in March 2015. Advances grew to Rs 114.85 lakh crore from Rs 56.16 lakh crore in the same period.
- Reduced Bad Loans: The Gross Non-Performing Assets (GNPA) ratio of PSBs plummeted to 2.30% (Rs 2.65 lakh crore) in September 2025. This marks a dramatic improvement from 4.97% in March 2015 and a peak of 14.58% in March 2018.
- Stronger Capital Base: The capital adequacy ratio of PSBs strengthened significantly, improving by 451 basis points to 15.96% in September 2025 from 11.45% in March 2015.
The successful launch of the CGSE, coupled with the strong performance of the MSME credit scheme and the underlying resilience of the banking sector, paints a promising picture for India's trade finance ecosystem. These measures are strategically designed to fortify exporters against global headwinds and sustain economic growth momentum.
