RBI allows restructure of defaulting MSME loans up to Rs 25 cr

Mumbai: In a measure of relief for the troubled micro and small industries segment, the RBI on Tuesday permitted a one-time restructuring of existing loans that are in default but "standard" as on January 1, 2019, without an asset classification downgrade.

Support for micro, small and medium enterprises (MSMEs) was one among the contentious issues between the Reserve Bank of India (RBI) and the government leading to the abrupt resignation of previous RBI Governor Urjit Patel last month and the immediate appointment of his successor Shaktikanta Das, who had earlier retired as the Union Economic Affairs Secretary.

The RBI in a statement said the issue of restructuring of MSME accounts was discussed in the meeting of the RBI board on November 19 when Patel was the Governor.

"The MSME issue has been examined in RBI and a view has been taken to facilitate meaningful restructuring of MSME accounts that have become stressed," it said.

"RBI has decided to permit a one-time restructuring of existing loans to MSMEs that are in default but 'standard' as on January 1, 2019, without an asset classification downgrade. The restructuring has to be implemented by March 31, 2020."

To be eligible for the scheme, the aggregate exposure, including non-fund based facilities of banks and non-banking finance companies (NBFCs), to an MSME borrower should not exceed Rs 250 million (Rs 25 crore) as on January 1, 2019, it added.

The apex bank has directed banks and NBFCs to make a provision of 5 per cent, in addition to the provisions already held, for accounts restructured under this scheme.

"Each bank/NBFC should formulate a policy for this scheme with Board approval which shall, inter alia, include framework for viability assessment of the stressed accounts and regular monitoring of the restructured accounts," the RBI said.

MSME registration and certification Mumbai

State to handhold MSMEs for a competitive edge

By Express News Service

BHUBANESWAR:   The Union Ministry of MSME has planned to set up eight to 10 technology centers in Odisha for low-cost automation at industrial growth centers which will be part of a bouquet of initiatives to give competitive advantage and quality control to these industries of the State. The technology centers will be extensions of Central Tool Room and Training Centre (CTTC) for which the State Government may provide building support, Joint Secretary to the Ministry Sudhir Garg said here on Wednesday.

Garg was addressing a seminar on “Boosting MSME Business through Zero-Effect-Zero Defect (ZED), Government-e-Market Place (GeM), IPR and Digital Marketing” on the sidelines of MSME International Trade Fair, 2018. These tech centers, he said, will help make available technical know-how to MSMEs and also upgrade technology which is the need of the hour. The CTTC, Bhubaneswar is a Lean Certifying Centre which will take up the awareness and training of MSMEs on Lean manufacturing in districts, he said. Chairing the session, Additional Chief Secretary to MSME Department LN Gupta informed that awareness-cum-registration camps for ZED, GeM, and Lean manufacturing will be initiated at district industries center (DIC) levels in April in all districts.

So far, Gupta said as many as 484 projects entailing a cost of `1,796 crore and employment to over 19,000 persons have been cleared by the District-level Single Window Clearance Committees. Subsidy of over `95 crore has been released to various MSMEs under different policies of the Government. Speaking on the occasion, Additional CEO, GeM KC Jha from Ministry of Commerce and Industry said Odisha Government has signed an MoU with GeM and a team will start training nodal officers of State departments by April.

Urging MSMEs to register themselves on GeM Portal to enhance their marketing reach, Jha said, so far, there are about 16,417 buyer organizations of GeM. Among others, CGM of RBI, Mumbai, Sonali Sengupta informed that there has been a 20 percent year-on-year growth in lending to MSME sector. Senior Director of Quality Council of India A Raj, Assistant Controller of Patents, Kolkata Shyam Kumar Barik, Director of Industries, Odisha SR Pradhan and president of OSSIA Samarajit Mohanty also spoke.

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