As of August 18, 2020 public sector and private banks have sanctioned loans worth over Rs 1.51 trillion under the 100 per cent Emergency Credit Line Guarantee Scheme, of which close to Rs 1.02 trillion has already been disbursed.
There has been a big jump in the sanctions in the last 15 days. The sanctions have increased rapidly by about Rs 12,000 crore while disbursement increased by close to Rs 10,000 crore.
In a tweet, the Ministry of Finance said: “Loans worth more than Rs 1 Lakh cr disbursed under #ECLGS (As on 18.08.2020). ECLGS was announced as a part of #AatmaNirbharBharatPackage, to mitigate distress caused due to #COVID19 by providing credit to different sectors, especially MSMEs.”
The ECLGS scheme is the biggest fiscal component of the Rs 20-trillion Self-Reliant India Mission package announced by Finance Minister Nirmala Sitharaman in May.
To ensure that the scheme achieves its objective of providing adequate liquidity to the MSME segment during the current difficult period, the Finance Ministry has regularly held meetings with the banks.
A Finance Ministry statement said that banks from both the public and the private sector have contributed to the success of the ECLGS. Loan amounts sanctioned by the Public Sector Banks increased to Rs 76,044.44 crore, out of which Rs 56,483.41 crore has already been disbursed as of August 18.
Similarly, private banks sanctioned loans to the tune of Rs 74,715.02 crore, out of which Rs 45,762.36 crore has already been disbursed.
The scheme would help more than 3 million units of MSMEs and other businesses restart their businesses post the lockdown.
As part of the Aatmanirbhar package, the Centre had announced its plans for Rs 3 trillion as additional credit to the MSMEs and small businesses. Such enterprises were to be eligible to receive up to 20 per cent of their existing borrowing as additional loans at interest rates which were capped. The loan would be available to units with up to Rs 25 crore outstanding and a turnover of up to Rs 100 crore whose accounts are standard.
The units will not have to provide any guarantee or collateral of their own. The amount will be 100 per cent guaranteed by the government of India providing a total liquidity of Rs three trillion to more than 4.5 million MSMEs.