Finance Minister Nirmala Sitharaman stated that banks cannot refuse credit to MSMEs under their facility of emergency credit. If any bank does so, it has to be duly reported.
Credit to MSMEs
Under the 100 per cent Emergency Credit Line Guarantee Scheme introduced, both public sector and private sector bank have already sanctioned loans worth Rs. 130491.79 crores and disbursed Rs. 82065.01 crores until July 23, 2020.
There have been many other efforts by the Central Government. Under the Aatmanirbhar Bharat Package, collateral-free automatic loans worth around Rs. 3 lakh crores were announced by the government for MSMEs.
The Reserve Bank of India had also announced a 3-month loan moratorium period in March to facilitate loan repayment by the hospitality industry. This moratorium period was extended by another 3 months, till August 31.
As stated by Sitharaman, all of these decisions were taken keeping in mind the economic slowdown caused by the pandemic and in consultation with experts. The Finance Ministry, along with the RBI, wishes to focus on the restructuring of the economy.
In an attempt to bolster the trade credit, India is also attempting to sign reciprocal agreements with all the countries that have access to its market, Sitharaman said.