Public Sector Banks Disburse Rs 14,691-Crore Loan to MSMEs Till June 11 Under Emergency Credit Guarantee Scheme: Finance Ministry

New Delhi, Jun 12: The Finance Ministry on Friday said public sector banks have disbursed Rs 14,690.84 crore till June 11, under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, hit hard by the coronavirus-induced lockdown.

Public sector banks (PSBs) have sanctioned loans worth Rs 29,490.81 crore under the 100 per cent ECLGS for the Micro, Small & Medium Enterprises (MSME) sector starting June 1.

The scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month. GST Council Meet: FM Nirmala Sitharaman Announces Relief on Late Fees For GST Return Filing, Check Details.

"As of 11 June 2020, #PSBs have sanctioned loans worth Rs 29,490.81 crore under the 100% Emergency Credit Line Guarantee Scheme, out of which Rs 14,690.84 crore has already been disbursed," Sitharaman said in a tweet.

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.

For this purpose, a corpus of Rs 41,600 crore was provided by the government, spread over the current and 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 plan to October 31 or till an amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by giving them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.

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, ie, regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore, would be eligible for GECL funding under the scheme.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)