Nirmala Sitharaman announces Rs 3 lakh crore Collateral-free Automatic Loans for businesses, including MSMEs

Finance Minister addressed a press conference on Wedesday at 4 pm to give more details about the economic package worth Rs 20 lakh crore announced by PM Modi on Tuesday.

"Beginning today I shall be coming forward to put out details of PM vision of PM," Sitharaman said.

Addressing the plight of the businesses hit by the coronavirus pandemic, Nirmala Sitharaman said Rs 3 lakh crores Collateral-free Automatic Loansfor Businesses, including MSMEs has been announced by the government.

Well, businesses and MSMEs have been badly hit due to COVID19 and they need additional funding to meet operational liabilities built up, buy raw material and restart business,

Hence, the government has decided to give Emergency Credit Line to Businesses/MSMEs from Banks and NBFCs up to 20% of entire outstanding credit as on 29.2.2020

Giving more details about this, Sitharaman said that borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnover will be eligible

She said that these loans will have 4 year tenor with moratorium of 12 months on Principal repayment.

Interest will also be capped under the newly announced scheme, Sitharaman said.

She says under this scheme, businesses will have 100% credit guarantee cover to Banks and NBFCs on principal and interest

It is important to note that this scheme can be availed till 31st October 2020.

Moreover, in a major development, she says no guarantee fee, no fresh collateral will be applicable.

With this initiative, Sitharaman says at least 45 lakh units can resume business activity and safeguard jobs.

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