Banks sanction Rs 1.56 lakh crore loans to MSMEs under credit guarantee program
On August 25, the Ministry of Finance said that banks had sanctioned loans of around Rs. 1,55,995 crore under the Rs 3 Crore Emergency Credit Line Guarantee Program (ECLGS) (ECLGS ) for the MSME sector reeling from the slowdown caused by the coronavirus pandemic.
However, disbursements under this stood at Rs 1,05,926 crore lakh until 24 August. The program is the largest fiscal component of the 20 lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May.
The latest ECGLS figures, released by the Ministry of Finance, include disbursements from 12 public sector banks (PSBs), 24 private sector banks, and 31 non-bank financial corporations (NBFCs).
“As of August 24, 2020, the total amount sanctioned under the 100% Emergency Credit Lines Guarantee Program by Public Service Bodies and Private Banks amounted to Rs 1,55,995.62 crore, of which 1 05 926.99 crore rupees have already been disbursed ”, declared the Minister of Finance. in a tweet.
Loans sanctioned by the PSB have increased to Rs 76,765 crore, of which Rs 58,230 crore has been disbursed as of August 24, she said. At the same time, private sector banks sanctioned Rs 79,230 crore in loans and disbursed Rs 47,696 crore.
“Compared to August 18, 2020, there is an increase of Rs 5,236.17 crore in the cumulative amount of sanctioned loans and an increase of Rs 3,681.22 crore in the cumulative amount of loans disbursed by PSBs and sector banks private combined as of August 24, 2020, ”Sitharaman said.
Market leader SBI sanctioned Rs 23,864 crore in loans and disbursed Rs 17,599 crore. It is followed by the Punjab National Bank, which sanctioned Rs 10,348 crore. However, its disbursements stood at Rs 7,621 crore as of August 24.
On May 20, Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25% through ECGLS for the MSME sector. Under this program, 100 percent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested borrowers from the Micro-unit Development and Refinancing Agency (MUDRA) in the form of a guaranteed emergency credit line (GECL).
To this end, a corpus of Rs 41,600 crore has been put in place by the government, spread over the current fiscal year and the next three fiscal years.
The scheme will be applicable to all loans sanctioned under the GECL facility during the period from the date of the scheme’s announcement to October 31 or until the amount of Rs 3 lakh crore is sanctioned under the GECL, whichever comes first.