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Banks have sanctioned ₹9,849.74 crore to individuals under the government-backed emergency credit line guarantee scheme (ECLGS), out of which 27% of the credit has been disbursed, as of September 21, official data showed.
Majority loan sanctions have been done by private banks, with only 11% sanctions from state-owned banks. The trend is similar in case of disbursals. Out of ₹2,617.08 crore that has been disbursed by the banks, only ₹499.82 crore has been disbursed by public sector banks, according to the data.
The collateral-free, government back scheme was launched in May to enable small businesses resume operations and help them pay salaries and rent, besides meeting restocking expenses, amid the covid-19 crisis. However, based on industry demand, last month, the ambit of the scheme was expanded to include micro, small and medium enterprises (MSMEs) with turnover of up to ₹250 crore from ₹100 crore, in line with the new MSME definition and individuals for business purposes.
Finance minister Nirmala Sitharaman had said that the expansion of the scheme to include individual loans for working capital purposes and larger MSMEs will help boost credit offtake by ₹1 trillion within the government’s overall ₹3 trillion target.
The scheme, part of the government’s Aatma Nirbhar Bharat initiative, ends in about a month, has sanctioned loans touching the ₹1.77 trillion mark as on 21 September. Out of this, bank and non-bank lenders have so far disbursed ₹1.25 trillion, at just around 40% of the finance ministry’s target of ₹3 trillion since its launch four months ago.
“As of 21 Sept 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs and private banks to MSMEs and individuals stands at ₹1,77,353 crore, of which ₹1,25,425 crore has already been disbursed,” the finance ministry said in a tweet.
The loan amounts sanctioned by state-owned lenders increased to ₹79,347.73 crore, of which ₹65,051.89 crore has been disbursed, the ministry said.
Even as public sector banks (PSBs) led sanctions and disbursal initially, latest data showed that private sector banks and non-banking financial companies (NBFCs) have stepped up credit disbursal on a par with state-owned peers. However, average loan disbursement per account by private banks is far more than the state-run banks.
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