The 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 June 26, 2020, public sector and private banks have sanctioned loans worth over Rs 1 lakh crore under the scheme, of which more than Rs 45,000 crore has already been disbursed.
There has been a big jump in sanctions in just over a weeks time as the amount was Rs 40,416 crore is of June 18, with disbursement of Rs 21,028.55 crore.
In a tweet, the Finance Ministry highlighted the achievement under the scheme that has been given with combined efforts of both private and public sector banks.
“Support to #MSMEs
“Loans worth more than Rs 1 lakh cr sanctioned in 37 days
“30 lakh+ borrowers under 100% Emergency Credit Line Guarantee Scheme(#ECLGS)
“Enabling #MSMEs to meet operational liabilities & restart their businesses,” the tweet said.
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 last month.
To ensure that the scheme achieve 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 over Rs 1 lakh crore sanctions, PSBs have sanctioned loans of Rs 57,525.47 crore whereas Private Sector Banks have sanctioned loans of Rs 44,335.52 crore. under ECLGS. The top lenders under the Scheme are SBI, Bank of Baroda, PNB, Canara Bank & HDFC.
The scheme would help more than 30 lakh units of MSMEs and other businesses restart their businesses post the lockdown.
As part of the Aatma Nirbhar package, the government had announced its plans for Rs 3 lakh crore as additional credit to MSMEs and small businesses. Such enterprises were to be eligible to receive upto 20 per cent of their existing borrowing as additional loans at interest rates which were capped.
The Rs 45,860.60 crore disbursement has been made to a wide spectrum of MSMEs covering 11,21,493 accounts. Country’s largest bank State Bank of India has been on the forefront of releasing loans under the scheme while industries in Tamil Nadu and Maharashtra have been the biggest beneficiaries.