The State Level Bankers Committee in Bengal on Monday decided to keep the credit flow target to the MSME sector unchanged at Rs 90,000 crore, while it put in a request with the Reserve Bank of India to increase the additional credit limit to 30 per cent.

The RBI has allowed 10 per cent additional limit over the existing credit limit to the sector, wracked by the lockdown caused by Covid-19. Credit disbursed by the banks to the MSME sector in 2019-20 was Rs 74,000 crore.

The decision was taken at an SLBC meeting on Monday chaired by Bengal finance minister Amit Mitra and attended by the CEO of Punjab National Bank, Mallikarjuna Rao, along with representatives of the state government and bank officials.

The decision to stick with the earlier target was welcomed by the MSME units but bankers remained wary of rising stress in the sector because of the lockdown.

“There is a heightened risk of exposure to any vulnerable sector. Credit support from banks could work effectively along with fiscal support to the MSME sector,” said an SLBC member.

As of December 31, the recovery rate for the MSME sector by public, private, co-operative and regional rural banks was 66 per cent.

In agriculture, the SLBC decided to increase the Kisan Credit Card (KCC) coverage to 46 lakh farmers and increase the loan for kharif crops to

Rs 10,000 crore. In the last financial year, nearly 5.17 lakh self-help groups (SHGs) were given loans amounting to Rs 8,400 crore.