The Ministry of Finance on Tuesday said public sector banks have disbursed Rs 16,031.39 crore under government’s Emergency Credit Line Guarantee Scheme (ECLGS).

The ECLGS Scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month. It is aimed to give financial assistance to COVID-19 hit MSMEs.

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The public sector banks have sanctioned loans worth Rs 32,049.86 crore under the 100 per cent ECLGS, out of which Rs 16,031.39 crore has already been disbursed till June 12.

The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the plan to October 31 or till an amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

To ensure that the scheme achieve its objective of providing adequate liquidity to the MSME segment during the current difficult period, the finance ministry has regularly held meetings with the banks.

After PSBs, the government is also prodding the private banks to increase loans under the scheme. As part of this, Finance Minister Nirmala Sitharaman on Monday chaired a meeting with Private banks and NBFCs to take stock of their preparedness to provide liquidity to the sector.

The Rs 16,000 crore disbursement has been made to a wide spectrum of MSMEs covering 4,24,000 accounts. Country’s largest bank, State Bank of India has been at the forefront of releasing loans under the scheme.

The bank has disbursed Rs 8,700 crore under the Rs 3-lakh crore the ECLGS scheme for the MSME sector.

“The bank has sanctioned GECL aggregating Rs 15,000 crore to 1.5 lakh MSME customers. SBI so far has disbursed loans worth Rs 8,700 crore,” SBI said in a statement.

The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by giving them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.