Private banks used ECLGS for MSME lending more than public sector: RBI

Private banks used ECLGS for MSME lending more than public sector: RBI

Mumbai, July 1 (KNN) Under the central government’s ECLGS scheme, private sector banks have secured a larger market share in lending to MSMEs compared to public sector banks (PSBs), according to the latest RBI Financial Stability Report.

PSBs managed to attract 22.65 lakhs of new borrowers while private banks surpassed the former figure three times by registering 67.61 lakhs of new borrowers under the ECLGS scheme.

According to the central bank report, public sector banks disbursed Rs 79,800 crore, which is lower than the Rs 95,700 crore disbursed by private banks.

On May 20, 2020, the government had launched the Emergency Line of Credit Guarantee Scheme (ECLGS) to support MSMEs and recover during the covid-19 pandemic.

It included the foreclosure period offering 100% guarantee coverage to certain borrowers.

Since then, it has undergone several iterations and currently its validity is extended until March 31, 2023 or until guarantees in the amount of Rs 5 lakh crore are issued. (KNN Office)

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