Keep Lending to MSMEs, But Support Other Businesses Too: Sitharaman to PSBs

New Delhi: Finance Minister Nirmala Sitharman on Tuesday held a review meeting with the Managing Directors of public sector banks (PSB) and asked them to continue reaching out and lending to MSMEs under the collateral-free Emergency Credit Line Guarantee Scheme. Also Read – India Will Prosper When Farmers Prosper, Says PM Modi as Centre Hikes MSP For 14 Kharif Crops

In the video conference, she also directed the state-run lenders to try meeting the credit requirements of other businesses. Also Read – ‘CHAMPIONS’: PM Modi Launches ICT-based Technology Platform to Empower MSMEs

In a tweet, the Department of Financial Services said: “FM’s review : PSBs to continue focus on sanction & reaching out to eligible MSMEs. To also target meeting credit needs of other businesses. #PSBsForAatmanirbharBharat @PMOIndia @FinMinIndia.” Also Read – Centre Okays Rs 3 Lakh Crore Collateral-free Credit Line For MSMEs

The directive comes a day after the Finance Minister, while addressing the FICCI National Executive Committee members, clarified that the Covid Emergency Credit Facility announced as part of the Aatma Nirbhar Bharat package covers all companies and not just MSMEs.

She also complimented the banks on their swift response to the demand for the collateral-free loan and sanctioning Rs 20,000 crore under the Emergency Credit Line Guarantee Scheme.

Sitharaman also advised the banks to maintain proactive outreach at branch level and keep the forms for ECLGS simple and formalities at minimum, said another tweet by DFS.

The scheme is part of the Aatma Nirbhar Bharat economic package. As per the government, banks would provide collateral-free loans to the eligible MSMEs loans up to Rs 3 lakh crore in total in a bid to overcome the financial crisis caused due to the coronavirus pandemic and the nationwide lockdown.