The finance ministry has been providing daily updates on the Emergency Credit Line Guarantee Scheme (ECLGS), that was announced as part of the central government's COVID-19 relief package for the MSME (micro, small and medium scale enterprises) sector.
Amidst receiving some criticism on the scheme for not providing quick cash assistance to small businesses, FM Nirmala Sitharaman's office has been tweeting daily updates on the value of loans that were sanctioned and cash disbursed each day by public sector banks (PSB) under the ECLGS.
On Tuesday, Sitharaman's office tweeted, "As of 12 June 2020, #PSBs have sanctioned loans worth Rs 32,049.86 crore under the 100% Emergency Credit Line Guarantee Scheme, out of which Rs 16,031.39 crore has already been disbursed. Here are the bank-wise and state-wise details. #AatmanirbharBharat #MSMEs"
On the previous day, FM's office said that as of 11 June 2020, PSBs sanctioned loans worth Rs 29,490.81 crore, out of which Rs 14,690.84 crore has already been disbursed. If the two figures are compared, in just one day, PSBs have disbursed in excess of Rs 1,300 crore.
The ECLGS scheme is the biggest fiscal component of the central government's Rs 20-lakh crore "Aatmanirbhar Bharat" package, wherein 100% collateral-free loans of up to Rs 3 lakh crore were to be disbursed to MSMEs via banks and NBFCs.
Amount extended as credit under ECLGS to a business/MSME will be up to 20 percent of total outstanding as on 29 February 2020.
However, many firms complained that these "pre-approved" ECLGS loans, were not being sanctioned by banks, especially private banks, for small businesses and were showing preference to those with higher annual sales. Some were also creating obstacles like insisting on documents or collateral.
FM Nirmala Sitharaman on Monday chaired a meeting with private banks and NBFCs to take stock of their preparedness to provide liquidity to the sector.
Rs 16,000 crore disbursement has been made to a wide spectrum of MSMEs covering 4,24,000 accounts and country's largest bank- State Bank of India- has been on the forefront of releasing loans under the scheme.