SIDBI sanctioned Rs.79,285 crore loans through psbloansin59minutes
Minister of State for Finance Dr Bhagwat Kisanrao Karad has listed out the measures taken by the Government for improving the flow of credit to MSME sector such as loans of Rs.3.09 lakh crore that have been sanctioned under the Emergency Credit Line Guarantee Scheme (ECLGS).
The scheme provided lending institutions 100% guarantee against any losses suffered by them due to non-repayment by borrowers, he said in a written reply to the Rajya Sabha on 21 Dec 2021.
The ECLGS was announced as part of the Aatma Nirbhar Bharat Package with the objective to help MSMEs and business enterprises to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis.
Other measures are:
The psbloansin59minutes Portal, launched on 2 November 2018, to facilitate in-principle approval of loans of up to Rs.1 crore (enhanced subsequently to Rs.5 crore) to MSMEs without human intervention. As informed by SIDBI as on 30 Nov 2021, loans amounting to Rs.79,285 crore were sanctioned on the portal.
RBI operationalized TReDS in 2017 to solve the problem of delayed payments to MSMEs. TReDS is an electronic platform where receivables of MSMEs drawn against buyers (large corporates, PSUs, Government Departments, etc.) are financed through multiple financiers at competitive rates through an auction mechanism. As on 3 Dec 2021, 26.64 lakh invoices amounting to Rs.56,694.14 crore have been discounted since inception by the three entities on TReDS platform.
Factoring transactions taking place through TReDS are eligible for classification under Priority Sector Lending (PSL). Further, loans sanctioned by banks to NBFC MFls and other MFls (Societies, trusts, etc.) which are members of RBI recognized Self Regulatory Organization (SRO) for the sector for on-lending to MSE sector, loans to registered NBFCs (other than MFls) for on-lending to MSMEs and bank finance to start-ups up to 50 crore also form a part of PSL.
RBI has also permitted co-lending by Banks and NBFCs to priority sector.
Subordinate Debt scheme for stressed MSMEs was approved on 1 June 2020. Under the scheme, banks provide promoters of stressed MSMEs with subordinate debt up to 15% of promoter’s stake or Rs.75 lakh, whichever is lower to be infused as equity/quasi equity in the business.
Pradhan Mantri Mudra Yojana (PMMY) scheme was launched on 8 April 2015 to provide access to institutional finance to unfunded Micro/Small business units with collateral free loans up to Rs.10 lakh for manufacturing, processing, trading, services and activities allied to agriculture and to help in creating income generating activities and employment.
RBI had permitted one-time restructuring for MSME accounts vide circulars dated 1 Jan 2019, 11 Feb 2020 and 6 Aug 2020.
In view of the need to support the viable MSME entities on account of the fallout of COVID-19, it was decided to extend the facility for restructuring existing loans to MSMEs up to Rs.50 crore classified as ‘standard’ without a downgrade in the asset classification subject to the conditions issued vide circular, dated 5 May 2021 and 4 June 2021 on ‘Resolution Framework 2.0.
For better transmission of monetary policy, RBI has advised banks to link all new floating rate loans to external benchmark for MSEs from 1 Oct 2019 and Medium enterprises from 1 April 2020.
The Regulatory Retail Portfolio threshold to a single counterparty was increased from Rs.5 crore to Rs.7.5 crore enabling Banks to assign a lower risk weight of 75% to such exposure to MSME entities, he said. fiinews.com
