Nirmala Seetharaman assures immediate action against banks denying loans to SMEs

Finance Minister Nirmala Sitharaman has advised banks not to refuse to provide emergency loans to small, medium and micro-enterprises (SME) under the emergency credit guarantee scheme to ease the pressure on firms facing liquidity crunch.

“Banks cannot refuse credit to MSMEs covered under emergency credit facility. If refused, such instances must be reported. I will look into it,” she said.

As on July 23, 2020, the total amount allowed under the 100 per cent emergency credit guarantee scheme in public sector banks and private banks was ₹ 1,30,491.79 crore. Of this, ₹ 82,065.01 crore has already been disbursed. Small, medium and micro enterprises have suffered a sharp decline due to the curfew. In order to repair them, the central government had announced that it would provide a loan of ₹ 3 lakh crore without any collateral till October.

The Finance Minister also said that the Ministry of Finance was in  talks with the Reserve Bank to further extend the repayment period for loans obtained from banks and to restructure loans.