New Delhi, June 1 (IANS): Finance Minister Nirmala Sitharaman on Monday said that public sector banks (PSBs) sanctioned collateral free loans worth Rs 3,200 crore to the MSME sector in a single day on June 1.

The loans were sanctioned under the Emergency Credit Line Guarantee Scheme that provides emergency credit lines and working capital to businesses, ensuring that the current coronavirus outbreak does not result in liquidity crisis for businesses.

"On a single day 1 June '20, #PSBs have sanctioned collateral-free loans worth Rs 3,200 crore through the Emergency Credit Line Guarantee Scheme," said a tweet from the office of Sitharaman.

The collateral free loan scheme is part over Rs 20 lakh crore economic package announced by the government to bring the economy back on track from the disruptions caused by Covid-19 pandemic.

"MSME in more than 3,000 Tier-II towns were covered in one day - today - under the collateral-free loans that will enable them to pay salaries, rent, and restocking expenses," another tweet said.

The government is ensuring that present coronavirus pandemic is prevented from making a serious dent on the Indian economy. It wants that investments should not be stopped and banks should ensure that all eligible borrowers get sufficient funds.