State-run banks have disbursed half the ₹32,050 crore loan they sanctioned to small businesses as of June 12 under the ₹3 lakh crore collateral-free emergency credit guarantee scheme launched in May to boost micro, small and medium enterprises (MSMEs) hit by the Covid-19 pandemic and subsequent lockdown.
“As of 12 June 2020, #PSBs [public sector banks] have sanctioned loans worth ₹32,049.86 crore under the 100% Emergency Credit Line Guarantee Scheme [ECLGS], out of which ₹ 16,031.39 crore has already been disbursed,” the office of finance minister Nirmala Sitharaman tweeted on Tuesday.
The emergency credit facility was announced by the finance minister on May 13 as a part of the first tranche of the Aatmanirbhar Bharat Abhiyan (Self-reliant India Initiative) of the National Democratic Alliance government.
It provides for an additional working capital loan at a concessional rate of interest to an existing borrower who is not a defaulter.
The Union cabinet had approved the additional funding scheme on May 21 at a concessional rate of 9.25% for MSMEs and other small businesses.
The scheme offers additional working capital equivalent to 20% of the outstanding credit as on February 29, 2020 in the form of a term loan to units with up to ₹25 crore in outstanding credit and annual revenue of up to ₹100 crore. According to the finance minister’s office, 12 PSBs have sanctioned loans to 854,128 accounts as of June 12. The money has been disbursed to 423,818 of them.
{{/usCountry}}The scheme offers additional working capital equivalent to 20% of the outstanding credit as on February 29, 2020 in the form of a term loan to units with up to ₹25 crore in outstanding credit and annual revenue of up to ₹100 crore. According to the finance minister’s office, 12 PSBs have sanctioned loans to 854,128 accounts as of June 12. The money has been disbursed to 423,818 of them.
{{/usCountry}}India’s largest bank, State Bank of India (SBI), has disbursed ₹8,776.19 crore under the scheme out of a total sanctioned amount of ₹14,559.89 crore. Canara Bank was second on the list with ₹1,306.47 crore of disbursal (out of a sanctioned amount of ₹2,739.76 crore). Sitharaman has said that the ₹3 lakh crore emergency working capital facility was 100% guaranteed by the Centre.