ECLGS: Banks sanction Rs 1.36 lakh crore under emergency credit scheme, says CARE Ratings

By: |
August 3, 2020 10:47 PM

The emergency credit scheme primarily aims at providing liquidity support to MSMEs under 'Aatmanirbhar Bharat Abhiyan' programme announced by Finance Minister Nirmala Sitharaman.

emergency credit scheme, COVID-19, coronavirus, CARE Ratings, Emergency Credit Line Guarantee Scheme, ECLGS,coronavirus relief package, MSME sector, Aatmanirbhar Bharat Abhiyan, Nirmala SitharamanAs on July 29, 2020 public sector banks (PSBs) and private sector banks (PVBs) sanctioned Rs 1,36,155 crore (in 40 lakh accounts) and disbursed Rs 87,227 crore, the report said. (Representational image)

Banks, both public and private sector, have sanctioned Rs 1.36 lakh crore in about 40 lakh accounts under the Emergency Credit Line Guarantee Scheme (ECLGS) till July 29, a CARE Ratings report said on Monday.

The total sanctioned amount works out to be 46 per cent of the target of Rs 3 lakh crore set up by the government while announcing the relief package for industry, especially the MSME sector, which was hit hard by the coronavirus pandemic.

The emergency credit scheme primarily aims at providing liquidity support to MSMEs under ‘Aatmanirbhar Bharat Abhiyan’ programme announced by Finance Minister Nirmala Sitharaman.

As on July 29, 2020 public sector banks (PSBs) and private sector banks (PVBs) sanctioned Rs 1,36,155 crore (in 40 lakh accounts) and disbursed Rs 87,227 crore, the report said.

As on July 23, 2020, PSBs and PVBs sanctioned Rs 1,30,492 crore (in 38.19 lakh accounts) and disbursed Rs 82,065 crore (in 20.16 lakh accounts) to MSMEs under the ECLGS scheme, it said.

“The cumulative sanctions is around 44 per cent of the total target of Rs 3,00,000 crore. The average sanction and average disbursement per account is Rs 3.42 lakh and Rs 4.07 lakh respectively,” the report said.

The share of PSBs’ sanctions and disbursements in total sanctions and disbursements as on July 23, 2020 stood at 55 per cent and 58 per cent, respectively, while PVBs’ share stood at 45 per cent and 42 per cent, respectively.

It further said PVBs sanctioned Rs 58,674 crore (in 4.86 lakh accounts) and disbursed Rs 34,434 crore (in 2.30 lakh accounts) to MSMEs under the ECLGS scheme.

The cumulative sanctions by PVBs is around 20 per cent of the total target of Rs 3,00,000 crore. The average sanction and average disbursement per account is Rs 12.05 lakh and Rs 14.95 lakh, respectively.

PSBs sanctioned Rs 71,818 crore (in 33.33 lakh accounts) and disbursed Rs 47,631 crore (in 17.86 lakh accounts) under the scheme.

The cumulative sanctions by PSBs is around 24 per cent of the total target of Rs 3,00,000 crore. The average sanction and average disbursement per account is Rs 2.15 lakh and Rs 2.67 lakh, respectively.

Maharashtra and Tamil Nadu have received highest sanction of Rs 7,446 crore and 7,399 crore, respectively, while disbursements in these states were at Rs 5,009 crore and Rs 4,940 crore, respectively, the report said.

Other states which have received significant levels of sanctions and disbursements include Uttar Pradesh, Gujarat and Karnataka.

As per the revised definition of MSMEs, the annual turnover ceiling of companies that could avail loans under the scheme has increased to Rs 250 crore from Rs 100 crore earlier.

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