Clipped from: https://www.business-standard.com/
Public sector bank executives said these three sectors have been hit badly in the immediate aftermath of lockdown announced in March 2020
Central Bank of India’s managing director and chief executive Pallab Mathapatra said banks had conveyed that they had starting disbursing money in sanctioned emergency lines | Illustration by Binay Sinha
In a meeting with Union Finance Minister Nirmala Sitharaman, chiefs of public sector lenders have argued for a package including debt restructuring for sectors like aviation, hospitality, and commercial real estate, which have been hit hard by the lockdown imposed to contain Covid-19 pandemic.
They have begun loan disbursal to units, especially MSMEs, to ensure timely support for starting operations.
Public sector bank executives said the three sectors have been hit badly and are crucial for ensuring jobs. The lenders said credit support for units in these sectors was “crucial in restarting economic activity”. All public sectors banks have sanctioned emergency working capital credit lines (10 per cent of existing exposure) to companies across these sectors, they said.
Central Bank of India Managing Director (MD) and Chief Executive Officer (CEO) Pallav Mohapatra said banks have conveyed that they have begun to disburse money in sanctioned emergency lines. “It will gather further momentum as lockdown is lifted and borrower’s complete documentation.”
A K Goel, MD & CEO, UCO Bank, said: “Since March, banks have extended Rs 6 trillion to all the sectors. UCO Bank has sanctioned close to Rs 15,000 crore. We are also outreaching clients for credit.”
In the meeting, the FM clarified on a scheme that intends to give a Rs 3-trillion guarantee for credit to MSMEs. “The government has said it would pay up Rs 3 trillion under guarantees if all loans covered under the scheme default. The rules outlined in the scheme have to be followed,” said another banker.
Padmaja Chunduru, MD & CEO, Indian Bank, said: “The FM has emphasised on quick disbursal of additional loans to MSMEs, to simplify process, formats and documentation. Banks have decided to focus also on tier-II and -III towns to ensure needy MSMEs get the assistance.”
(With inputs from Abhijit Lele)