Restructuring of loans up to ₹25 crore: The government’s new year gift to MSMEs

After much elbowing by the government, the RBI has allowed lenders to do a one-time restructuring of loans of up […]

   

After much elbowing by the government, the RBI has allowed lenders to do a one-time restructuring of loans of up to ₹25 crore. This new year bonanza announced by Reserve Bank of India (RBI) is likely to breathe fresh life to the stressed micro, small and medium enterprises (MSMEs).

The RBI has asked bank and non-banking financial companies (NBFCs) to formulate a loan re-cast policy that would encompass a framework for viability assessment of the stressed accounts and regular monitoring of the restructured accounts. This comes as good news for MSMEs, which had faced the double rage of demonetisation and the introduction of the goods and service tax (GST).

According to available government data, with an impressive size of ₹23 lakh crore, the Indian MSME sector accounts for a quarter of total commercial lending in India, but the average ticket size of less than ₹50 lakh has placed its growth is at the lower end of the growth spectrum (when compared with other sectors).

This move by the RBI is likely to radically alleviate the cash crunch woes of most MSMEs and boosting manufacturing activities across the country and create more job opportunities in the sector.






Trending

Neo-banks in India-Filling the Digital Expectations Gap in the Banking Sector

Neo-banks: The next revolution in Indian banking sector

Rehan Dhorajiwala

“We first need a substantial support for production to even think about meeting domestic demand”: Rehan Dhorajiwala, All India Toy Federation (AITF)

Hotel Operations in COVID-19 Era; Revamping Protocols and Technology is the Key for Recovery

Revamping protocols and technology: Hotel industry is looking to reboot in the new normal

COVID-19 Impact: Record decline in Securitisation Volumes

Covid-19 impact: record decline in securitisation volumes

Nitin Gadkari approves new scheme to make India aatmanirbhar in agarbatti production

Nitin Gadkari approves new scheme to make India aatmanirbhar in agarbatti production

Impact of coronavirus on real estate

Knight frank report: real estate stakeholders expect improvement in next 6 months

essentials lockdown

Know what people stockpiled most during lockdown?

MSME credit scheme: 43% of Rs 3 lakh crore sanctioned

RBI LOANS

FM Sitharaman: In talks with RBI to restructure loans, extend moratorium

PM Modi, msme loans

Prime minister Modi tells bank chiefs to boost MSME loans

25 - 20 million MSMEs lost jobs

25-30 million lost jobs in MSMEs, 10-15 million jobs on the verge

K-Satyanarayana-Ecom-Express

India is consumption based economy and it needs logistics more than ever now: K Satyanarayana, Ecom Express