Liquidity to MSME rises as bank sanctions cross INR 1.38 lakh crore
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Liquidity to MSME rises as bank sanctions cross INR 1.38 lakh crore

By IANS Updated: Aug 05, 2020 2:33 pm

New Delhi, Aug 5 (IANS): 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 August 3, 2020, public sector and private banks have sanctioned loans worth over INR 1.38 lakh crore under the 100 per cent Emergency Credit Line Guarantee Scheme, of which close to INR 92,000 crore has already been disbursed.

There has been a big jump in sanctions in the last 18-20 days with sanctions increasing rapidly by about INR 15,000 crore while disbursement increased even rapidly by close to INR 25,000 crore.

In a tweet, the office of finance minister Nirmala Sitharaman said: “As of 03 Aug 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at INR 1,37,586.54 crore, of which INR 92,090.24 crore has already been disbursed.”

The ECLGS scheme is the biggest fiscal component of the INR 20-lakh crore Self-Reliant India Mission package announced by Finance Minister Nirmala Sitharaman in May.

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 the public and private sector have contributed to the success of the ECLGS. Loan amounts sanctioned by Public Sector Banks increased to INR 72,820.26 crore, of which INR 52,013.73 crore has been disbursed as of August 3.

Similarly, private banks sanctioned loans to the tune of INR 64,766.28 crore while disbursed INR 40,076.52 crore.

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 government had announced its plans for INR 3-lakh crore as an 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. The loan would be available to units with up to INR 25 crore outstanding and turnover of up to INR 100 crore whose accounts are standard.

The units will not have to provide any guarantee or collateral of their own. The amount will be 100 per cent guaranteed by the government of India providing total liquidity of INR 3 lakh crore to more than 45 lakh MSMEs.

By IANS Updated: Aug 05, 2020 2:33:43 pm