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The MSME sector, which has been facing problems of credit availability and bad loans, has welcomed the recently announced new framework by the Reserve Bank of India (RBI) for 'Revival and Rehabilitation' applicable to MSMEs having loan limits up to Rs 25 crore, including accounts under consortium or multiple banking arrangement. The framework is to be operationalised by all the banks not later than June 30, 2016.
Sanjay Bhatia, President, FICCI-CMSME and Managing Director, Hindustan Tins Works Ltd said in a statement that the formation of Special Mention Account and mandatory formation of a committee at each district for stressed Micro, Small and Medium Enterprises (MSMEs) by the banks would enable faster resolution of stress in an MSME account at the right time. “This, he said, would also help in reducing non-performing assets in MSMEs.”
The policy aims at a timely and transparent mechanism for restructuring the debts of viable/potentially viable MSME entities facing problems and to maintain the economic value of assets, a FICCI release said, adding that so far, the sector felt that banks were “more concerned in restructuring the large corporates due to their larger stake/loan amount.”
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