Private sector banks catch up with PSBs on MSME loan scheme

Private sector banks are finally catching up with state-run banks in participating in the government’s emergency credit line guarantee scheme (ECLGS). According to the latest data tweeted by Union Finance Minister Nirmala Sitharaman, private sector banks have so far disbursed Rs 51,687 crore as on September 3, compared with Rs 62,025 crore by public sector banks.

If one looks at the sanction figures, private banks have sanctioned Rs 82,950 crore so far as against Rs 786067 crore by state-run banks.

The government launched the MSME loan scheme as part of the COVID-19 economic package. As per this, MSMEs can borrow up to 20 percent of their outstanding loan amount as on February 29.  State-run banks have been aggressively pushing the scheme from the beginning while private banks joined later.

According to data, the country’s largest lender State Bank of India is the biggest contributor to the scheme. The bank has disbursed Rs 18,971 crore and sanctioned over Rs 24,000 crore. This is followed by Punjab National Bank which has disbursed Rs 8,264 crore so far.