Economy

Go the extra mile to ensure funds reach MSMEs, FM tells bank chiefs

Our Bureau New Delhi | Updated on June 09, 2020 Published on June 09, 2020

Finance Minister Nirmala Sitharaman   -  Kamal Narang

Lenders told to keep forms simple, formalities limited

Finance Minister Nirmala Sitharaman has asked public sector banks (PSB) chiefs to maintain “proactive outreach” at branch level to ensure a success of the ₹3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) announced by the government to meet the liquidity needs of the MSME sector during the Covid-19 crisis.

PSBs should also keep the forms for ECLGS simple and formalities at the minimum, Sitharaman said at a review meeting with PSB chiefs through video conferencing on Tuesday.

The Finance Minister also noted the rapid traction by PSBs for achieving sanctions of ₹20,000 crore under ECLGS.

This review meeting came a day after she clarified at an industry event that the ₹3-lakh crore ECLGS would be available for all companies, not just the MSMEs of the country. This has, however, raised eyebrows in banking circles as there is now a possibility of large corporates cornering a significant allocation of the 100 per cent guarantee scheme.

At the review meeting, Sitharaman asked PSBs to continue their focus on sanction and reaching out to eligible MSMEs. Banks have also been asked to target meeting the credit needs of other businesses.

Meanwhile, as of June 8, PSBs have sanctioned loans worth ₹1,109.03 crore for MSME hubs in 12 States under the 100 per cent ECLGS.

Of this, ₹599.12 crore has already been disbursed to 17,904 accounts. The largest disbursement so far has gone to Tamil Nadu where the MSME hub at Coimbatore has got ₹143.76 crore (1,758 accounts) and the hub at Tirupur has got ₹97.28 crore (760 accounts).

In Gujarat, the MSME hubs at Rajkot and Surat have got ₹33.80 crore (981 accounts) and ₹39.74 crore (992 accounts) respectively.

While the MSME hub in Durgapur in West Bengal received ₹61.45 crore (2,005 accounts), the city of Durg in Chhattisgarh has got ₹32.71 crore (804 accounts), official data released by the Finance Ministry showed.

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Published on June 09, 2020
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