The Finance Ministry has asked public sector banks (PSBs) to place in the public domain time frames for ensuring timely origination, processing, sanction and disbursement of loans to crank up economic activity from April 20, 2020.

Business activities have come to a standstill since March 25, as the government imposed a 21-day nationwide lockdown to contain the coronavirus pandemic. Though the lockdown has been extended by 19 days till May 3, select activities have been exempted from it.

The Ministry emphasised that timely credit to businesses in the context of the Covid-19 pandemic is critical for revival of economic activity.

So, the indicative time frame from processing to disbursement in the case of working capital demand loans for existing micro, small and medium enterprise (MSME), corporate and agriculture borrowers, and self help groups (SHGs) that has been prescribed is “within 3-6 working days”.

The time frame in the case of working capital reassessment up to ₹5 crore, and above ₹5 crore for existing borrowers, is “within 6-9 working days”, and “within 12-15 working days”, respectively.

The Ministry advised banks to draw up detailed activity-wise time frames to achieve the turnaround time sought.

Put details in public domain

PSBs have been asked to host all customer facing information — details of Covid-19 related credit schemes, checklist of documents required for each scheme/ borrower category, time frames for communicating decision regarding sanction and in case of sanction for documentation and disbursement, along with simple frequently asked questions (FAQs) — in the public domain through their website.

Further, they must tag this information to the Twitter handle of the Department of Financial Services, and also send emails and SMS alerts to all their existing borrowers in the target segment.

Additionally, PSBs should set up a dedicated helpline number and email account for Covid-19 related queries, facilitation and grievances.

There are 12 PSBs in the Indian market, and they had a market share of 61 per cent in loans and advances of all scheduled commercial banks’ as at March-end 2019.

The Ministry of Home Affairs has allowed resumption of select permitted economic activities from April 20, 2020, in areas such as agriculture and horticulture, essential industrial production, fisheries, plantation, animal husbandry, MNREGA works, public utilities (such as oil and gas, power sector, telecom and internet services), freight logistics, all facilities in the supply chain of essential goods, IT services, some industries/ industrial establishments, construction activities, and e-commerce.

Referring to the lockdown being extended till May 3 and the government simultaneously providing some relaxations from April 20, State Bank of India’s economic research department, in its Ecowrap newsletter has estimated the overall GDP loss for FY21 at around ₹12.1 lakh crore.

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