New Delhi, Jun 1 (PTI) Public sector banks (PSBs) on Monday sanctioned Rs 3,200 crore through the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme for the MSME sector hit hard by the coronavirus-induced lockdown.

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

Also Read | Samsung’s New Galaxy Watch to Be Launched Soon.

"In a single day, June 1, 2020, #PSBs have sanctioned collateral-free loans worth Rs 3,200 crore through the Emergency Credit Line Guarantee Scheme," the finance minister said in a tweet.

"#MSMEs in more than 3,000 tier-II towns were covered in one day (Monday) under the collateral-free loans that will enable them to pay salaries, rent, and restocking expenses," it said.

Also Read | Zoom Plans to Offer Stronger Encryption for Video Calls Only to Its Paid Customers.

On May 21, the Union Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (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 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 of India spread over the current and the next three financial years.

The scheme would 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 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 (MLIs) like 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.

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 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)