Loans of ₹5.66L-cr sanctioned, says FM
State-run banks to disburse funds to 4.2mn borrowers from MSMEs, other sectors after lockdown
NEW DELHI: India’s economy is “poised to recover” as state-run banks have sanctioned loans worth ₹5.66 lakh crore over last two months to about 4.2 million account holders belonging to micro, small and medium enterprises (MSMEs), retail, agriculture and corporate sectors, Union finance minister Nirmala Sitharaman’s office said in a series of tweets on Thursday.
The banks will disburse the money after the covid-19 lockdown is lifted.
“During March-April 2020, PSBs (public sector banks) sanctioned loans worth ₹5.66 lakh crore for more than 41.81 lakh accounts. These borrowers are from MSME, retail, agriculture and corporate sectors, waiting for disbursal soon after lockdown lifts. Economy poised to recover!” said one of the tweets.
Niranjan Hiranandani, president, Associated Chambers of Commerce and Industry of India (Assocham), said, “The industry does need money, particularly MSMEs. It is good that the money has been sanctioned... the disbursal should happen as soon as possible.”
He stressed on an urgent need for a stimulus package to bring the economy back on track, and added that the government should also release payments pending with public sector undertakings, tax refunds and money due to state governments. “This alone will infuse ₹2.5-3 lakh crore in the system and help the economic recover.”
Sanjay Aggarwal, senior vice president, PHD Chamber of Commerce and Industry, said, “An economic stimulus of ₹16 lakh crore, about 7% of the GDP [gross domestic product], is the minimum required for facing challenges of the covid-19.”
However, it is of paramount importance that the disbursal of loans should happen as soon as possible, said Aggarwal. “The wait for the lockdown to be over is fine, but thereafter the fear is that banks will demand documents from the borrowers that will create unnecessary difficulties.”
Sitharaman’s office tweeted there is a sustained credit flow to non-banking finance companies and housing finance companies. “PSBs sanctioned loans worth ₹77,383 crore between March 1-May 4. Inclusive of TLTRO (Targeted Long Term Repo Operations) funds, total financing of ₹1.08 lakh crore is ensuring business stability and continuity going forward,” it tweeted.
It said PSBs have also given loan moratorium and over 32 million account holders have availed the three-month moratorium.