The State Bank of India ( SBI) issued loans worth Rs3000 crore to a total of 22,000 MSME units, with the government’s credit guarantee scheme for the micro , small and medium sized enterprise sector (MSME) to a amount of Rs3 lakh crores.
On Thursday SBI President Rajnish Kumar said that the bank paid out Rs 3,000 crore in the MSME industry in a single day to 22,000 units.
“A scheme like guarantee scheme for the SMEs, it has capital implications for the banks. In a way, this Rs 3 trillion means Rs 30,000 crore further capitalisation also has happened indirectly for the banks,” Kumar was quoted in the report as saying.
Kumar also claimed that the forecasts on a bleak future for the Non-Leisting Assets (NPAs) banks were overestablished. But he also emphasized that economic uncertainty persists about how the banking sector should grow in the next six months.
Kumar said that there was a thin line between risk avoidance and prudence, trying to clear the air of the impression that banks were not lenting and that they had become more risk-averse.
In what appeared to be an effort to dispel the notion that parking funds with the Reserve Bank of India implies banks are risk averse, he said, “If I get Rs 2 lakh crore in deposits in two months, even if I’m a very efficient bank, I cannot disburse so much within two months.”
Throughout answering fund-starved, NBFCs, Mr Kumar said: “We surely help all the NBFCs for which the Bank’s (SBI’s) trading record is satisfactory.”
Kumar noted that claims that the banks with rising optimistic assets are being overestimated by the doomsday scenario, but added that it remains unclear whether the industry could take shape over the next six months.
Nation’s leading investor, State Bank of India, charged Rs 3,000 crore loans to MSMEs in the Rs 3 lakh crore collateral-free loan system on Monday. SBI chairman Rajnish Kumar said “In his speech at the 125th anniversary of the business association of CII we are strongly bullish regarding this project. The government’s credit insurance on MSME loans allows room for the financial sector to infuse Rs 30 000 crore. In the background of the Rs 20 Lakh Crore economic package which PM Modi launched, the emergency loan scheme was announced last month by Minister of Finance Nirmala Sitharaman to help revive Covid Hit companies and MSMEs.
As of February 29, 2020, msme accounts with up to Rs 25 in outstanding loan may request a collateral-free credit that is less or equal to 60 days due on the date and up to Rs 100 in turnover. The government would provide 100% guarantee coverage to banks and NBFCs lending to qualifying small and medium-sized enterprises.