Banks have sanctioned 47.7 per cent of the targeted Rs 3 lakh crore under the Emergency Credit Line Guarantee Scheme (ECLGS) for stressed MSMEs while disbursements were at 32.9 per cent of the total amount as of August 12. While public sector banks sanctioned loans of Rs 74,502.85 crore, private bank sanctions were Rs 68,815.24 crore. Disbursals by public sector and private banks were at Rs 54,677.11 crore and Rs 43,988.82 crore, respectively, according to official data.
Of the total 22.77 lakh loan accounts which received disbursement under the scheme, public sector banks (PSBs) catered to 19.84 lakh crore — or 87.1 per cent of total accounts — while remaining 2.93 lakh accounts — or 12.9 per cent — were served by private banks and non-banking financial companies (NBFCs). The latest data reflects that private banks and NBFCs continue to focus on large accounts, with average disbursement per account at Rs 15 lakh, while public sector banks’ average disbursement per account stood at Rs 2.75 lakh.
In terms of loan sanctions also, similar divergence is seen with private banks sanctioning loans to 16.5 per cent of total accounts while PSBs serving the 83.5 per cent of the total 40.10 lakh accounts which received sanctions from lenders. Data for private sector banks also includes details provided by 31 NBFCs.
With the government allowing individuals who have taken business loans and larger MSMEs to avail funds under the scheme from August 4, banks expect sanctions and disbursement to pick up pace going forward. Launched on May 23, ECLGS is open until October 31 or until Rs 3 lakh crore has been sanctioned.
“Out of my total loan book of Rs 10,000 crore effectively eligible under the scheme, our disbursement was only Rs 300 crore till the start of the month. This will grow significantly as individuals — truck owners, taxi operators, agriculture equipment buyers — are now eligible for loans under the ECLGS,” said a banker with a private bank, who asked not to be named. Vehicle and equipment financing NBFCs, whose 80-90 per cent of the borrowers are individuals, expect disbursements to pick up.
“Compared to 03 Aug 2020, there is an increase of Rs 5,731.55 crore in the cumulative amount of loans sanctioned & an increase of Rs 6,551.93 crore in the cumulative amount of loans disbursed by both #PSBs and private sector banks combined as on 12 Aug 2020,” Finance Minister Nirmala Sitharaman said in a tweet Friday.
ECLGS — which provides additional 20 per cent collateral-free credit fully guaranteed by the central government against loan losses — was extended to individual entrepreneurs from August 4. Companies with outstanding loans of up to Rs 50 crore and annual turnover of up to Rs 250 crore, as on February 29, 2020, were allowed to avail additional financing under the scheme from August 4 — up from the earlier limits of Rs 25 crore and Rs 100 crore, respectively.
Interest rates of banks and financial institutions are capped at 9.25 per cent per annum under the scheme, while NBFCs can lend at a maximum of 14 per cent per annum.
State Bank of India has disbursed the highest amount of Rs 16,573 crore under the scheme, followed by Punjab National Bank (Rs 6981 crore), Canara Bank (Rs 6,444 crore), and Bank of Baroda (Rs 5,730 crore).
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