New Delhi, Jun 15 (KNN) Finance Minister, Nirmala Sitharaman held a meeting with the heads of major private sector banks to take stock of their preparedness to provide liquidity to the Micro, Small and Medium Enterprises (MSME) sector amid COVID-19 crisis.

"FM Smt. @nsitharaman chairing a meeting through VC with Major Pvt Banks & NBFC to ensure effective roll out of ECLGS and uninterrupted/smooth liquidity to Indian MSMEs in this difficult time," the Finance Ministry tweeted on Monday.

The meeting was also attended by CEOs of major Non-Banking Financial Companies (NBFCs). “Debasish Panda, Secretary, Department of Financial Services, was also present in the meeting”, the finance ministry said in another tweet.

As of June 11, public sector banks have sanctioned loans worth Rs 29,490.81 crore under the 100 per cent ECLGS, out of which Rs 14,690.84 crore has already been disbursed.

On May 21, the cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for the MSME sector.

Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.

The government will also provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.

'The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) 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,'' the government said.

'The collateral free loans are for those with Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months,' said Finance Minister Nirmala Sitharaman.