PSBS lend ₹3,893 cr in emergency credit

PUBLIC LENDERS HAVE ALSO GRANTED LOANS WORTH ₹10,361.75 CR UNDER THE 100% ECLGS

NEWDELHI: The Finance Ministry on Wednesday said that public sector banks (PSBS) have disbursed ₹3,892.78 crore in the f i rst t wo days of t he month under the ₹3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus-induced lockdown.

Meanwhile, PSBS have sanctioned loans worth ₹10,361.75 crore under the 100% ECLGS starting June 1.

The scheme is the biggest fiscal component of the ₹20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.

Micro, small and medium enterprises (MSMES) are the backbone of t he e c onomy. “Under #Aatmanirbharbharat Abhiyan Govt is committed to t h e i r g r o wt h . R e a c h o u t @DFSFORMSMES for all queries regarding Eclgs/other measures and their swift resolution,” a tweet from the Department of Financial Services said.

On May 21, the Union cabinet had approved additional funding of up to ₹3 lakh crore at a concessional r at e of 9 . 2 5 % through ECLGS for the MSME sector.

Under t he s c heme, 1 0 0 % guarantee coverage will be provided by National Credit Guara n t e e T r u s t e e C o mpa n y (NCGTC) for additional funding of up to ₹3 lakh crore to eligible MSMES and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guarant eed emergency credit l i ne (GECL) facility.

For this purpose, a corpus of ₹41,600 crore was provided by the government spread over the current and t he next t hree financial years.

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

The main objective of the scheme is to provide an incentive to member lending institutions to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.

All MSME borrower accounts with an outstanding credit of up to ₹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 ₹100 crore, would be eligible for GECL f u n d i n g u n d e r t h e scheme.