Banks sanction Rs 1.58 lakh crore loans to MSMEs under credit guarantee scheme
New Delhi, Sep 4 (KNN) Banks have sanctioned loans to Micro, Small and Medium Enterprises (MSMEs) worth Rs 1.58 lakh crore under Emergency Credit Line Guarantee Scheme (ECLGS) till August 31st.
However, disbursements against this stood at more than Rs 1.11 lakh crore, the Finance Ministry tweeted on Thursday following Nirmala Sitharaman’s meeting with the heads of banks and NBFCs to review the progress of schemes including partial credit guarantee and subordinate debt apart from ECLGS.
The ECLGS was announced by the government as a part of Aatma Nirbhar Bharat Package, to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially MSMEs. The government had also launched the subordinate debt scheme last scheme to offer Rs 20,000 crore guarantee cover to 2 lakh MSMEs.
The scheme was introduced to help distressed MSME accounts or NPAs as on April 30, 2020.
During the meeting, Sitharaman also asked banks to roll out the debt resolution or recasting schemes by September 15 for COVID-related stress among businesses.
The minister also said that COVID related distress must not impact the lenders’ assessment of their creditworthiness as and when the moratorium on loan repayments is lifted.
Sitharaman also focused on ensuring banks and NBFCs “immediately putting in place Board-approved policy for resolution, identifying eligible borrowers and reaching out to them.”
The lenders assured that they are ready with their resolution policies, have started the process of identifying and reaching out to eligible borrowers, and that they will comply with the timelines stipulated by the Reserve Bank of India (RBI).