Banks sanctions under ECLGS to MSMEs slow down; struggle at Rs 1.2 lac crore

New Delhi, July 11 (KNN) Banks have sanctioned Rs 1,20,099 crore loans to COVID hit Micro, Small and Medium Enterprises (MSMEs) under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS).

However, disbursements against this stood at Rs 61,987.90 crore till Thursday (July 9) under the 100 per cent ECLGS for MSMEs.

"As of 9 July 2020, the total amount sanctioned under the 100 per cent Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,20,099.37 crore, of which Rs 61,987.90 crore has already been disbursed," said the Finance Minister Nirmala Sitharaman in a tweet.

The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May.

The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 22 private sector banks and 21 non-banking financial companies (NBFCs).

''Under the ECLGS, the loan amounts sanctioned by PSBs increased to Rs 68,145.40 crore, of which Rs 38,372.88 crore has been disbursed as of July 9,'' she added.

At the same time, private sector banks have sanctioned Rs 51,953.97 crore and disbursed Rs 23,615.02 crore.

"Compared to 4 July 2020, there is an increase of Rs 5,596.79 crore in the cumulative amount of loans sanctioned and an increase of Rs 5,896.72 crore in the cumulative amount of loans disbursed, by both #PSBs and private sector banks combined as on 9 July 2020," Sitharaman said.

Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company 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.

For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and the next three financial years.

The scheme will 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 the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

All MSME borrower accounts with an outstanding credit of up to Rs 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 Rs 100 crore are eligible for GECL funding under the scheme.