Aggregate loan sanctions by PSBs and private banks at ₹75,426.39 crore; disbursements at ₹32,894.86 crore

It’s now official. Private sector banks and NBFCs have been doing some tangible work to ensure the smooth rollout of the 100 per cent Emergency Credit Line Guarantee Scheme (ECLGS), which is focussed on supporting MSMEs in these tough Covid-19 times, going by data released by the Finance Ministry.

They have till date sanctioned loans worth ₹32,687.27 crore to MSMEs and disbursed ₹10,697.33 crore under the scheme, official data tweeted by Finance Minister’s Office late Monday evening showed.

This is the first time the Finance Ministry has made public the data on the performance of private banks under the scheme. It may be recalled that Finance Minister Nirmala Sitharaman had, in mid-June, held a video conference with the top 20 private banks and NBFCs. For the ₹3-lakh crore credit guarantee scheme to be successful, the private sector banks should also play an important role, it was then conveyed.

 

PSBs make progress

State-owned banks, too, made good progress under the scheme, having sanctioned loans worth ₹42,739.19 crore and made disbursements to the tune of ₹22,197.54 crore till date. The loans sanctioned under the scheme by the private sector banks (PSBs) and private banks, put together, stood at ₹75,426.39 crore while cumulative disbursements stood at ₹32,894.86 crore.

State-wise details for PSBs reveal Gujarat emerged at the top of the chart with cumulative sanctions to MSMEs at ₹4,309.10 crore, dislodging Maharashtra, with cumulative loan sanctions at ₹4,146.99 crore. Although Tamil Nadu came in third in terms of loans sanctioned, at ₹4,144.50 crore, it continued to be the leader in terms of cumulative disbursements, at ₹2,625.11 crore.

The cumulative disbursements for MSMEs in Gujarat and Maharashtra stood at ₹1,739.86 crore and ₹1,883.96 crore, respectively. For Uttar Pradesh, the loans sanctioned to MSMEs stood at ₹3,257.08 crore and disbursements stood at ₹1,449.21 crore.

As regards bank-wise sanctions, the official data showed that the maximum cumulative sanction came from State Bank of India, at ₹16,234.85 crore in respect of 2,29,149 accounts. Of this, the disbursement stood at ₹10,960.33 crore for 1,13,920 accounts.

The ECLGS scheme is a specific response to the unprecedented situation of Covid-19 and seeks to provide much needed relief to the MSME sector by incentivising Member Lending Institutions (MLIs) to provide additional credit of up to ₹3-lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.

Under this scheme, loans extended to MSMEs by banks and NBFCs would be 100 per cent guaranteed by the National Credit Guarantee Trustee Company (NCGTC). The loan — which includes a moratorium for the first 12 months — will be extended in the form of additional working capital term loan facility in case of banks and additional term loan in case of NBFCs to MSMEs with a turnover of up to ₹100 crore till October 31, 2020 and interested Pradhan Mantri Mudra Yojana borrowers.

As many as 45 lakh MSMEs are expected to benefit from the ECLGS scheme.

Published on June 23, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism