The Central government is going all out to ensure that liquidity concerns of the MSME sector are addressed on priority under its Emergency Credit Line Guarantee Scheme (ECLGS).
As of July 1, 2020 public sector and private banks have sanctioned loans worth over Rs 1.10 lakh crore under the 100 per cent Emergency Credit Line Guarantee Scheme, of which more than Rs 52,000 crore has already been disbursed.
There has been a big jump in sanctions in the last couple of weeks. And just in the last six days up to July 1 sanctions have increased by a whopping Rs 10,000 crore while disbursement has increased by Rs 7,000 crore.
In a tweet, office of Finance Minister Nirmala Sitharaman said: “As of July 1, the total amount sanctioned under the 100 per cent Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,10,343.77 crore, of which Rs 52,255.53 crore has already been disbursed.”
The ECLGS scheme is the biggest fiscal component of the Rs 20-lakh crore Self-Reliant India Mission package announced by Finance Minister Nirmala Sitharaman in May.
To ensure that the scheme achieves its objective of providing adequate liquidity to the MSME segment during the current difficult period, the finance ministry has regularly held meetings with the banks.
A finance ministry statement said that banks from both public and private sector have contributed to the success of the ECLGS. Of the Rs 52,000 crore disbursement, public sector banks have released Rs 33,000 crore to about 12,59,000 MSME accounts while private banks have disbursed Rs 19,000 crore to about 1,45,000 accounts.
The scheme would help more than 30 lakh units of MSMEs and other businesses restart their businesses post the lockdown.
As part of the Aatmanirbhar package, the Central government had announced its plans for Rs three lakh crore as additional credit to MSMEs and small businesses. Such enterprises were to be eligible to receive up to 20 per cent of their existing borrowing as additional loans at interest rates which were capped.