Private banks are slow to implement the Rs 3 trillion credit program for the MSME sector, Union Finance Minister Nirmala Sitharaman, the industry body affiliated with RSS, Laghu Udyog Bharti, said on Monday ( LUB).

Sitharaman had called Laghu Udyog Bharti General Secretary Govind Lele for comment on the implementation of the Rs 3 trillion Emergency Credit Line Guarantee Program (ECLGS) for the MSME sector, which has been hit hard by the coronavirus-induced lockdown.

Lele said he informed the minister that major public sector banks such as the State Bank of India and Bank of India have started lending in accordance with the program, PTI news agency reported.

But at the branch level, three-year revenue and profitability projections are sought before sanction, he said.

“Private banks are slow to implement the program. Therefore, they must be immediately educated to implement the program, ”Lele told the finance minister.

READ ALSO : Businesses rush to register as an MSME, but most may not get loans: Officials

He said that in order to achieve their goal, bank officials give preference to high value loan accounts, so it is important that the government instructs a proportionate sanction of program funds.

The LUB urged Sitharaman to include the unscheduled cooperative banks in the program as they have a very large number of MSME loan accounts in their portfolio.

The RSS affiliate is investigating the implementation of the program, Lele said, adding that it would be done within a week and the results would be shared with the finance minister.

Sitharaman announced last month an unsecured automatic loan of Rs 3 trillion for businesses, including MSMEs, as part of the Rs 20 trillion economic package.

The loan would have a term of four years with a 12-month moratorium, she said.

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