Archive · 20 Jan 2026
PSBs Sanction ₹52,300 Crore in MSME Loans via Digital Model
Public Sector Banks in India have approved over 3.96 lakh loans worth ₹52,300 crore for small businesses.
They used a new digital system called the Credit Assessment Model (CAM) to do this.
This system checks things like GST records, bank statements, and tax returns to decide if a business should get a loan.
It's much faster and easier than the old way, where businesses had to go to the bank and provide lots of paper documents.
Now, business owners can apply for loans online anytime, and the bank tells them right away if they can get the loan.
This new system helps small businesses get the money they need more quickly and easily.
As the Union Budget approaches, bankers and NBFCs are calling for structural policy support to address challenges like deposit growth, rising funding costs, and the credit gap faced by MSMEs.
They are seeking incentives to encourage deposit growth, improve credit transmission, and support technology adoption in banking.
Public Sector Banks sanctioned over ₹52,300 crore in MSME loans using the Credit Assessment Model (CAM).
The model uses digital data like GST records, bank statements, and tax returns for loan approvals.
Over 3.96 lakh loan applications were approved between April 1 and December 31, 2025.
The new system allows for instant in-principle sanctions and reduces turnaround time significantly.
Business owners can apply for loans online anytime, without needing to visit a bank branch.
- Who
- Public Sector Banks (PSBs) in India
- What
- Sanctioned over ₹52,300 crore in MSME loans using a new digital assessment model
- When
- Between April 1 and December 31, 2025
- Where
- India
- Why
- To facilitate faster and more transparent credit flow to the MSME sector
Bankers and NBFCs
Government and Regulators
Deposit Growth and Credit Expansion
Bankers and NBFCs
Bankers are facing challenges due to lower deposit growth compared to credit expansion, leading to stress in deposit rates and net interest margins. They seek structural policy support to address these issues.
Government and Regulators
The government and regulators need to acknowledge the structural shift in household savings and provide targeted incentives to encourage deposit growth and improve credit transmission.
MSME Funding Support
Bankers and NBFCs
NBFCs are looking for structural measures to bridge the persistent credit gap faced by MSMEs, including lower cost of capital, improved access to liquidity, and efficient risk-sharing mechanisms.
Government and Regulators
The government is expected to focus on long-term structural support for MSMEs, including the creation of a dedicated NBFC–MSME lending category and access to cheaper refinance funding.
Technology Adoption in Banking
Bankers and NBFCs
Bankers are seeking clear policy support for the adoption of digital and AI-led solutions in banking, with a focus on risk management, fraud prevention, compliance, and customer service.
Government and Regulators
The government and regulators need to provide incentives for investment in digital infrastructure and data security to help banks deploy technology at scale with confidence.
- Loan Amount
- ₹52,300 crore
- Number of Loans
- 3.96 lakh
- Time Period
- April 1 - December 31, 2025
- Model Used
- Credit Assessment Model (CAM)
- Data Sources
- GST data, bank statements, ITR, KYC, CIC data
- Portal Used
- Jan Samarth Portal
- Publication Date
- January 19, 2026
- Budget Presentation Date
- February 1, 2026
- Deposit Growth Challenge
- Deposit growth has lagged credit expansion, pushing up deposit rates and squeezing margins.
- MSME Credit Gap
- MSMEs face a significant and enduring credit shortfall, contributing over 30% to GDP.
