Nirmala Sitharaman had called the unit's chief for feedback on implementation of scheme for MSMEs (File)
Private banks are delaying implemention of the Rs 3-lakh crore credit scheme for the Micro, Small and Medium Enterprises (MSME) sector, RSS-affiliated industry body Laghu Udyog Bharti (LUB) informed Union Finance Minister Nirmala Sitharaman on Monday.
Ms Sitharaman had called Laghu Udyog Bharti general secretary Govind Lele to seek feedback on the implementation of Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, which has been hit hard by the nationwide coronavirus lockdown.
Mr Lele said he informed the minister that prominent public sector banks like State Bank of India and Bank of India have started extending loans as per the scheme. But at the branch level, three-year projections of revenue and profitability are being sought before sanctioning any amount, he said.
"Private banks are dilly-dallying in implementing the scheme. Hence, they are required to be immediately instructed to implement the scheme," Mr Lele told the finance minister.
He said to complete their target, bank officials are giving preference to high-value loan accounts. Hence it is important that the government instruct banks for proportionate sanctioning of funds in the scheme.
The Laghu Udyog Bharti has urged Ms Sitharaman to include non-scheduled cooperative banks in the scheme as they have a very large number of MSME loan accounts in their portfolio.
The RSS-affiliated body is conducting a survey on the implementation of the scheme, Govind Lele said, adding that it will be done in a week and the findings will be shared with the finance minister.
Finance Minister Nirmala Sitharaman had last month announced Rs 3 lakh crore collateral-free automatic loan for businesses, including MSMEs, as part of the Rs 20 lakh crore economic package.
The loan will have a four-year tenure with a moratorium of 12 months, she had said.