In the fiscal year 2022-23 (FY23), Punjab National Bank (PNB) emerged as the leading public sector bank (PSB) in providing collateral-free MSME loans, surpassing 12 other PSBs in two loan categories.
Under the first category, offering loans up to Rs 10 lakh, PNB led the way, disbursing 18 lakh loans totaling Rs 27,124 crore by March 2023. Following closely were Bank of Maharashtra with 15.20 lakh loans worth Rs 22,783 crore and Union Bank of India with 14.64 lakh loans worth Rs 20,351 crore. State Bank of India and Bank of Baroda were also notable performers in this category, providing 9.92 lakh loans worth Rs 17,406 crore and 13.66 lakh loans worth Rs 21,543 crore, respectively.
MSME Loans up to Rs 10 lakh
| Bank | No. of Loans | Amount of Loans |
| Punjab National Bank | 18 lakh | 27,124 crore |
| Bank of Maharashtra | 15.20 lakh | 22,783 crore |
| Union Bank of India | 14.64 lakh | 20,351 crore |
| State Bank of India | 9.92 lakh | 17,406 crore |
| Bank of Baroda | 13.66 lakh | 21,543 crore |
In the second category, offering loans between Rs 10 lakh and Rs 25 lakh, PNB remained at the forefront, granting 1.07 lakh loans totaling Rs 13,247 crore. Bank of Maharashtra reported 82,389 loans worth Rs 11,206 crore, while Union Bank of India disbursed 72,296 loans amounting to Rs 18,570 crore. SBI and Bank of Baroda also contributed significantly with 54,753 and 44,062 loans worth Rs 6,869 crore and Rs 5,372 crore, respectively, as of March 2023.
MSME Loans Rs 10 lakh to Rs 25 lakh
| Bank | No. of Loans | Amount of Loans |
| Punjab National Bank | 1.07 lakh | 13,247 crore |
| Bank of Maharashtra | 82,389 | 11,206 crore |
| Union Bank of India | 72,296 | 18,570 crore |
| State Bank of India | 54,753 | 6,869 crore |
| Bank of Baroda | 44,062 | 5,372 crore |
Last year SBI was ranked 1st
It is worth noting that in the previous fiscal year 2021-22 (FY22), SBI had performed exceptionally well in both loan categories. They provided 18.61 lakh loans worth Rs 28,297 crore under the up to Rs 10 lakh segment and 88,247 loans amounting to Rs 11,357 crore in the Rs 10 lakh to Rs 25 lakh category, as of March 2022.
The Minister of State for MSME, Bhanu Pratap Singh Verma, presented the data to Parliament, emphasizing that scheduled commercial banks, except Regional Rural Banks, were mandated not to accept collateral security for loans up to Rs 10 lakh extended to MSE sector units. Banks were also advised to offer collateral-free loans up to Rs 10 lakh to all units financed under the Prime Minister’s Employment Generation Programme (PMEGP) administered by KVIC. Additionally, banks had the authority to waive the collateral requirement for loans up to Rs 25 lakh based on the credibility and financial capability of the MSE units, subject to authorized approvals.
The report also revealed that credit outstanding to the MSME sector by commercial banks increased by 12.3 percent to Rs 22.6 lakh crore in FY23 from Rs 20.11 lakh crore in FY22, according to recent data shared by the ministry.