Urban co-operative banks seek guarantee cover for their MSME borrowers

Urban co-operative banks (UCBs) want their micro, small and medium enterprise (MSME) borrowers to be covered under credit guarantee cover for giving assistance to units hit by Covid-19 pandemic.  

The National Federation of Urban Co-operative Banks and Credit Societies Ltd. (NAFCUB), in letter to the union finance minister, said UCBs are important and significant institutions that finance micro and small enterprises. UCBs' outstanding loans to MSMEs amount to Rs 82,000 crore.

The government provides for guarantees to commercial banks, financial institutions and NBFCs for lending to MSMEs through the National Credit Guarantee Trust Company (NCGTC) and its various funds. However, UCBs are