Banks sanction loans of Rs 1 lakh cr to 30 lakh MSME under credit guarantee program


The finance ministry said on Tuesday that banks had sanctioned more than 1 lakh rupee of loans under the 3 lakh rupee emergency credit line guarantee program (ECLGS) for the shocked MSME sector the economic slowdown induced by the coronavirus.

While Rs 45,860 crore is being disbursed under 100% ECLGS for Micro, Small and Medium Enterprises (MSMEs) until June 26, he said.

The program is the largest fiscal component of the Rs 20 million lakh “Aatmanirbhar Bharat Abhiyan” package announced by Finance Minister Nirmala Sitharaman last month.

The latest figure on ECLGS, released by the Ministry of Finance, includes the 12 public sector banks (PSBs), 20 private sector banks and 8 NBFCs.

“As part of the 100% ECLGS backed by government guarantee, public and private sector banks sanctioned loans worth over Rs 1 lakh crore as of June 26, 2020, of which over 45,000 Rs crore have already been disbursed, ”he added. the ministry said in a statement.

It would help more than 30 lakh units from MSME and other companies restart operations after the lockdown, he said.

PSB sanctioned loans of Rs 57,525.47 crore, while private sector lenders sanctioned Rs 44,335.52 crore under ECLGS, which began on June 1, he said. .

As of June 26, public sector banks have disbursed Rs 29,232 crore and their private sector counterparts Rs 16,628 crore.

The main lenders in the program are the State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank and HDFC Bank, he added.

Market leader SBI sanctioned Rs 19,593 crore and disbursed Rs 12,026 crore on June 26. It is followed by Bank of Baroda with a penalty of Rs 7,273 crore and a disbursement of Rs 2,695 crore.

The second-largest Punjab National Bank lender was in third place, according to the data, with the cumulative penalty of Rs 7,188 crore. Its disbursement was almost a third at Rs 2,125 crore.

At the state level, Maharashtra’s business units obtained the highest cumulative sanction of Rs 6,179 crore from banks, while disbursements stood at Rs 2,774 crore at the end of June 26.

It is followed by Uttar Pradesh with a penalty of Rs 5,646 crore, with a disbursement of Rs 2,861 crore.

On May 21, Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25% through ECLGS for the MSME sector.

Under this program, 100% 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 Agency. development and refinancing of micro-units (MUDRA), in the form of a guaranteed emergency credit line (GECL).

To this end, a corpus of Rs 41,600 crore has been provided 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 an amount of Rs 3 lakh crore is sanctioned under GECL, whichever comes first.

The main objective of the program is to incentivize member credit institutions to increase access and enable the availability of an additional financing facility for MSME borrowers, given the economic distress caused by the COVID-crisis. 19, by offering them a 100% guarantee. for any loss suffered by them due to the non-repayment of the GECL financing by the borrowers.

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

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