NEW DELHI: The government is looking to make urban co-operative banks eligible to lend under the Rs 3 lakh crore emergency credit line guarantee scheme (ECLGS) for micro, small and medium businesses (MSMES), introduced under the government’s atma nirbhar bharat package.
The finance ministry is considering the move, and a decision in this regard is likely soon, Union minister for MSMEs and road transport and highways Nitin Gadkari has said.
Due to dual regulation and supervision, cooperative banks are not included as member lending institutions under the ECLGS, Gadkari said at the FICCI-SBI Atmanirbhar MSME Virtual Conclave on Monday.
Gadkari quoted a ministry of corporate affairs letter, stating that “data regarding their financial position is being collected from scheduled State cooperative banks and urban cooperative banks for considering their inclusion as a member lending institution under the scheme in consultation with RBI depending upon the headroom available in the scheme.”
Gadkari said that the headroom should not be an issue since the 3 lakh crore scheme has seen less than half the amount disbursed so far“.Regarding the headroom I don’t think this is a problem because out of Rs 3 lakh crore, up till now there is only disbursement of Rs 1.2 lakh crore,” Gadkari said.
Under the Scheme, 100% guarantee coverage is to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. three lakh crore to eligible MSMEs and interested MUDRA borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
Gadkari said that small businesses are not getting finance from banks, and a micro-finance institution to particularly cater to the segment will be established soon.
“We are discussing this and we are going to formulate the policy. It should be free from red-tapism, it should be totally transparent, time bound and result oriented,” Gadkari said. “And anyone who will apply will get the finance within three days. This is the idea,” he added.