ECLGS for MSMEs: HDFC Bank disbursed Rs 23,000 crore to small businesses under emergency credit scheme

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Updated: March 21, 2021 12:15 PM

Credit and Finance for MSMEs: The government had launched the Rs 3 lakh crore scheme on May 13, 2020, as part of the Atmanirbhar Bharat package to provide emergency credit to businesses from banks and NBFCs up to 20 per cent of the entire outstanding credit as of February 20, 2020.

The lender continues to face technical glitches, even as Reserve Bank of India’s (RBI’s) is conducting a special audit of banks’ IT infrastructure.The lender continues to face technical glitches, even as Reserve Bank of India’s (RBI’s) is conducting a special audit of banks’ IT infrastructure.

Credit and Finance for MSMEs: Part of the member lending institutions supporting the government’s Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, private sector lender HDFC Bank has disbursed around Rs 23,000 crore as of December 31, 2020. “HDFC Bank ranks amongst top banks in terms of extension of credit under the ECLGS scheme which stood at around Rs. 23,000 crore as on December 31, 2020,” the bank said in a statement. The government had launched the Rs 3 lakh crore scheme on May 13, 2020, as part of the Atmanirbhar Bharat package to provide emergency credit to businesses from banks and NBFCs up to 20 per cent of the entire outstanding credit as of February 20, 2020.

“We are aligned with the government’s vision to support the MSME sector which is among the largest job creators and an engine for economic growth. Even during the lockdown, it has been our pride and privilege to serve our MSME customers across sectors/industries during the lock down, especially so in the semi urban and rural areas,” said Sumant Rampal, Senior Executive Vice president, Business banking and Healthcare Finance, HDFC Bank.

Financial Express Online had last week reported that banks and NBFCs have already sanctioned 82 per cent of the targeted Rs 3 lakh crore amount as of February 28, 2021. According to the data from the National Credit Guarantee Trustee Company (NCGTC), the amount of loan sanctioned under the scheme stood at Rs 2.46 lakh crore till February-end, MSME Minister Nitin Gadkari had said in a written reply to a question in the Rajya Sabha. Moreover, out of the 92.27 lakh total borrowers under ECLGS as of February 28, 87.50 lakh (95 per cent) borrowers were MSMEs.

Also read: Non-govt PFs investing in AIFs will add to MSMEs’ fundraising options, mobilise domestic capital: Experts

Moreover, the Finance Ministry has already spent the entire amount of Rs 4,000 crore allocated towards the implementation of the scheme for the financial year 2020-21, according to the government data. The revenue expenditure incurred by the Department of Financial Services towards ‘assistance to the NCGTC, which is the guarantee provider under the ECLGS scheme to member lending institutions (MLIs), stood at Rs 4,000 crore as of January 22, 2021, according to the data shared by Minister of Finance Anurag Singh Thakur in the Lok Sabha on Monday. The amount allocated towards the same for FY21 was Rs 4,000 crore.

HDFC Bank also announced that its loans to MSMEs have grown by 30 per cent from December 2019 to 2020 and stood at pre-Covid levels. “We reached out to them with a suite of customized products which they could access conveniently either through physical or electronic channels,” added Rampal. A PTI report citing HDFC Bank on Friday said that the bank’s MSME book was at Rs 1.4 lakh crore in December 2019, which grew by more than Rs 60,000 crore or 30 per cent to Rs 2,01,758 crore by the December 2020 quarter. The growth provided HDFC Bank a 10.6 per cent share system-wide MSME lending to become the second-largest lender in this segment after SBI.

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