Money & Banking

ECLGS: Private banks too do some heavy lifting, reveal Finance Ministry data

Our Bureau New Delhi | Updated on June 23, 2020

Aggregate loan sanctions by PSBs and private banks at ₹75,426.39 crore; disbursements at ₹32,894.86 crore

It’s now official. Private sector banks and NBFCs have been doing some tangible work to ensure the smooth rollout of the 100 per cent Emergency Credit Line Guarantee Scheme (ECLGS), which is focussed on supporting MSMEs in these tough Covid-19 times, going by data released by the Finance Ministry.

They have till date sanctioned loans worth ₹32,687.27 crore to MSMEs and disbursed ₹10,697.33 crore under the scheme, official data tweeted by Finance Minister’s Office late Monday evening showed.

This is the first time the Finance Ministry has made public the data on the performance of private banks under the scheme. It may be recalled that Finance Minister Nirmala Sitharaman had, in mid-June, held a video conference with the top 20 private banks and NBFCs. For the ₹3-lakh crore credit guarantee scheme to be successful, the private sector banks should also play an important role, it was then conveyed.


PSBs make progress

State-owned banks, too, made good progress under the scheme, having sanctioned loans worth ₹42,739.19 crore and made disbursements to the tune of ₹22,197.54 crore till date. The loans sanctioned under the scheme by the private sector banks (PSBs) and private banks, put together, stood at ₹75,426.39 crore while cumulative disbursements stood at ₹32,894.86 crore.

State-wise details for PSBs reveal Gujarat emerged at the top of the chart with cumulative sanctions to MSMEs at ₹4,309.10 crore, dislodging Maharashtra, with cumulative loan sanctions at ₹4,146.99 crore. Although Tamil Nadu came in third in terms of loans sanctioned, at ₹4,144.50 crore, it continued to be the leader in terms of cumulative disbursements, at ₹2,625.11 crore.

The cumulative disbursements for MSMEs in Gujarat and Maharashtra stood at ₹1,739.86 crore and ₹1,883.96 crore, respectively. For Uttar Pradesh, the loans sanctioned to MSMEs stood at ₹3,257.08 crore and disbursements stood at ₹1,449.21 crore.

As regards bank-wise sanctions, the official data showed that the maximum cumulative sanction came from State Bank of India, at ₹16,234.85 crore in respect of 2,29,149 accounts. Of this, the disbursement stood at ₹10,960.33 crore for 1,13,920 accounts.

The ECLGS scheme is a specific response to the unprecedented situation of Covid-19 and seeks to provide much needed relief to the MSME sector by incentivising Member Lending Institutions (MLIs) to provide additional credit of up to ₹3-lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.

Under this scheme, loans extended to MSMEs by banks and NBFCs would be 100 per cent guaranteed by the National Credit Guarantee Trustee Company (NCGTC). The loan — which includes a moratorium for the first 12 months — will be extended in the form of additional working capital term loan facility in case of banks and additional term loan in case of NBFCs to MSMEs with a turnover of up to ₹100 crore till October 31, 2020 and interested Pradhan Mantri Mudra Yojana borrowers.

As many as 45 lakh MSMEs are expected to benefit from the ECLGS scheme.

Published on June 23, 2020

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