New Delhi: 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 Rs 1.38 lakh crore under the 100 per cent Emergency Credit Line Guarantee Scheme, of which close to Rs 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 Rs 15,000 crore while disbursement increased even rapidly by close to Rs 25,000 crore.
In a tweet, 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 Rs 1,37,586.54 crore, of which Rs 92,090.24 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 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. Loan amounts sanctioned by Public Sector Banks increased to Rs 72,820.26 crore, of which Rs 52,013.73 crore has been disbursed as of August 3.
Similarly, private banks sanctioned loans to the tune of Rs 64,766.28 crore while disbursed Rs 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 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 loan would be available to units with upto Rs 25 crore outstanding and turnover of up to Rs 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 a total liquidity of Rs 3 lakh crore to more than 45 lakh MSMEs.