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Thursday, July 09, 2020

Emergency credit: PSU banks sanction Rs 40,416 crore to MSME sector, highest in Gujarat and Tamil Nadu

Gujarat and Tamil Nadu received the highest sanctions of `4,156 crore and `4,012 crore, respectively, till June 18, according to government data.

By: ENS Economic Bureau | Mumbai | Updated: June 22, 2020 5:09:42 am
nirmala sitharaman, msme loan scheme, msme sector, msme sector loan, banks loan, sbi, bank of india, msme loan scheme, economic package, indian express PSU banks had around 58 per cent and private sector banks 35 per cent market share in total bank credit as on March 31, 2020. (Source: Bloomberg/Representational)

Twelve public sector undertaking (PSU) banks have sanctioned Rs 40,416 crore in favour of 12.43 lakh accounts and disbursed Rs 21,029 crore among 5.81 lakh accounts in the MSME sector under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme as on June 18. Gujarat and Tamil Nadu received the highest sanctions of Rs 4,156 crore and Rs 4,012 crore, respectively, till June 18, according to government data.

The cumulative sanctions now work out to around 14 per cent of the total target of Rs 3 lakh crore. The average sanction and average disbursement per account is Rs 3.25 lakh and Rs 3.62 lakh, respectively. State Bank of India (SBI) has recorded the maximum cumulative sanctions and disbursements of Rs 15,950 crore and Rs 10,667 crore, respectively, which is 0.8 per cent and 0.5 per cent of its total loan book.

As per the scheme, banks can lend Rs 3 lakh crore till October 31, 2020, of which 14 per cent has already been already sanctioned by PSU banks till June 18. They may need to sanction Rs 33,400 crore per month for the next four months to maintain their share in overall bank credit, according to a Care Ratings report.

Bank of Baroda (BoB) has recorded the second largest cumulative sanctions at Rs 4.987 crore (which is 0.8 per cent of total loan book and 5.7 per cent of total MSME loan book as on December 31, 2019).

Punjab National Bank sanctioned loans worth Rs 4,271 crore and disbursed Rs 1,367 crore. Canara Bank sanctioned Rs 3,983 crore and disbursed Rs 1,954 crore. “SBI and BoB have 22 per cent and 65 per cent of overall loan book under moratorium,” the report said.

Gujarat and Tamil Nadu witnessed disbursals of Rs 1,657 crore and Rs 2,560 crore, respectively. Other states which received significant levels of sanctions and disbursements included Maharashtra (Rs 4,009 crore sanctions), Uttar Pradesh (Rs 3,094 crore) and Rajasthan (Rs 2,608 crore).

“The ECLGS scheme is a specific step to the unprecedented situation of Covid-19. It aims to provide the relief and is expected to increase the liquidity of the MSME sector and provide an additional credit of up to Rs 3 lakh crore at low cost,” the rating agency said.

PSU banks had around 58 per cent and private sector banks 35 per cent market share in total bank credit as on March 31, 2020.

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