Finance Ministry Sanctions Rs 1.61 Lakh Crore Worth of Bank Loans to MSMEs Under ECLGS to Battle COVID-19 Pandemic

New Delhi, September 8: Union Finance Minister Nirmala Sitharaman on Monday announced that the Central government had so far sanctioned loans amounting to Rs 1.61 lakh crore to MSMEs under the Emergency Credit Line Guarantee Scheme (ECLGS). The amount has been sanctioned as a component of the Rs 20-lakh crore Self-Reliant India Mission package, announced by FM Sitharaman in May 2020 for firms to tackle the economic effect of COVID-19 pandemic.

Informing about the update, the Union Finance Minister took to Twitter and wrote, "As of 03 Sept 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs and private banks stand at Rs 1,61,017.68 crore, of which Rs 1,13,713.15 crore has already been disbursed."

Adding more, Sitharaman wrote, "Compared to 24 Aug 2020, there is an increase of Rs 5,022.06 crore in the cumulative amount of loans sanctioned & an increase of Rs 7,786.16 crore in the cumulative amount of loans disbursed by both #PSBs and private sector banks combined as on 03 Sept 2020."

Here's what the Finance Minister's office tweeted:

Among other details, the Finance Minister said that public sector banks have so far sanctioned Rs 78,067.21 crore under the ECLG scheme, and Rs 62,025.79 crore has been disbursed as of September 3, 2020. She added that the Union Finance Ministry regularly held review meetings with the banks to ensure that the scheme achieves its objective of providing adequate liquidity to the MSME segment during the current difficult period.

As per government estimate, the ECLG scheme would benefit more than 30 lakh units of MSMEs and other businesses to restart their businesses after the COVID-19 lockdown. It is to be known that the government had announced its plans for Rs 3 lakh crore as an additional credit to MSMEs and small businesses under Aatma Nirbhar package.

Under the scheme, the loans would be available to units -- whose accounts are standard -- with up to Rs 25 crore outstanding and turnover of up to Rs 100 crore. However, these firms will not have to provide any guarantee or collateral of their own as it will be 100 per cent guaranteed by the government and a total liquidity of Rs 3 lakh crore to more than 45 lakh MSMEs will be provided.