Banks Sanction Rs. 1.27 Lakh Crore to MSMEs

New Delhi, India - According to the Finance Ministry, banks have sanctioned loans worth Rs. 1,27,582 crore under the Rs. 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector affected by the economic slowdown due to the ongoing Covid-19.

However, disbursements against this stood at Rs. 77,613 crore till July 20 under the 100 percent ECLGS for MSMEs. The latest numbers on ECLGS, as released by the Ministry, include disbursements by all 12 public sector banks (PSBs), 22 private sector banks and 21 non-banking financial companies (NBFCs).

"As of July 20, 2020, the total amount sanctioned under the 100 percent ECLGS by PSBs and private banks stands at Rs. 1,27,582.60 crore, of which Rs. 77,613.06 crore has already been disbursed," Finance Minister Nirmala Sitharaman's office informed.

Under ECLGS, the loan amounts sanctioned by PSBs has risen to Rs. 70,894.59 crore, of which Rs. 45,797.29 crore has been disbursed as of July 20. Whereas, private sector banks have sanctioned Rs. 56,688 crore and disbursed Rs. 31,815 crore.

"Compared to July 15, 2020, there is an increase of Rs. 4,237.44 crore in the cumulative amount of loans sanctioned and an increase of Rs.9,301.51 crore in the cumulative amount of loans disbursed, by both PSBs and private sector banks combined as on July 20, 2020," Sitharaman said.

Maharashtra leads among the states by sanctioning the highest amount of Rs. 7,358.59 to MSMEs, of which Rs. 4,785.85 crore has been disbursed.

SBI has sanctioned loans worth Rs. 20,988 crore and disbursed Rs. 14,811 crore, followed by Punjab National Bank, which has sanctioned Rs. 9,372 crore and disbursed Rs. 5,047 crore as of July 20.

On May 20, the Cabinet approved additional funding of up to Rs. 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for the MSME sector.

The scheme provides 100 percent guarantee coverage by the National Credit Guarantee Trustee Company for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency borrowers in the form of a guaranteed emergency credit line (GECL) facility. To this end, a corpus of Rs. 41,600 crore has been set up by the government, spread over the current and next three financial years.

The scheme is applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs. 3 lakh crore is sanctioned under GECL, whichever is earlier.

All MSME borrower accounts with an outstanding credit of up to Rs. 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs. 100 crore are eligible for GECL funding under the scheme.

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