ECLGS of Rs 3 lakh crore was announced as part of the Rs 20 lakh crore stimulus package by PM Modi to make India Aatmanirbhar.

Credit and Finance for MSMEs: The amount sanctioned by banks to MSMEs under the Rs 3 lakh crore collateral-free emergency credit line guarantee scheme (ECLGS) has crossed Rs 1 lakh crore mark as of June 26, 2020. According to the data shared by the Ministry of Finance, Rs 1,01,861 crore was sanctioned out of which Rs 45,860 crore was disbursed to MSMEs impacted by Covid. This is 1,078 per cent up from Rs 3,892 crore disbursed as of June 1, 2020. The amount disbursed and sanctioned as of June 20, 2020, stood at Rs 35,000 crore and Rs 79,000 crore respectively. “This would help more than 30 lakh units of MSMEs & other businesses restart their businesses post the lockdown,” the ministry said.

Out of the total amount disbursed so far, the share of public sector banks was Rs 29,232.27 crore while private banks disbursed Rs 16,628.33 crore. Moreover, the number of MSME accounts disbursed with the emergency credit stood at 11,21,493 while sanctioned were 30,11,724 as of June 26. The top lenders to MSMEs under the scheme were SBI with over Rs 12,000 crore disbursed followed by Canara Bank with more than Rs 3,400 crore, Bank of Baroda with Rs 2,695 crore disbursed, Rs 2,391 crore by Union Bank of India, Rs 2,125 crore by Punjab National Bank and more.

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The Rs 3 lakh crore ECLGS was announced as part of the Rs 20 lakh crore stimulus package by PM Modi to make India Aatmanirbhar. Eligible MSMEs for scheme would get up to 20 per cent of their existing borrowing as additional loans at interest rates which were capped. Last week, the government had also launched the subordinate debt scheme, announced in the stimulus package, to provide Rs 20,000 crore guarantee cover to 2 lakh MSMEs. The scheme was launched for MSMEs that are distressed or have turned into non-performing assets (NPAs) as on April 30, 2020.

Meanwhile, bank credit growth to micro and small enterprises (MSEs) in the first month of the financial year 2020-21 was 3.3 per cent to Rs 11 lakh crore from Rs 10.65 lakh crore in April FY20, according to the RBI bulletin. Nonetheless, there was a contraction of 4.4 per cent from Rs 11.49 lakh crore in March (FY20).