NEW DELHI: Seeking to make lending efficient for the MSME sector, the government will soon issue guidelines in this regard. “The finance ministry will soon meet RBI officials and heads of top public-sector and corporate banks. The purpose is to work on the issues including a detailed lending guideline for the banks to lend to the MSME sector.
The meeting will also review how many days of non-payment is required to declare an account NPA and duplicacy of loans availed under various schemes,” a senior official from the finance ministry told Express.
The official added that there is an increase in cases where the same person is availing multiple loans under various schemes from different banks. The new guidelines will help fix the problem so that credit is available for more beneficiaries.
According to the official, there will be separate guidelines for MSMEs that haven’t registered for GST. The government is also of the view that the distribution of loans must be done depending on how much employment the borrower generates. The government will discuss the implementation of online loan sanction facility for the sector, which was announced by the finance minister in his Budget speech.
Union minister Giriraj Singh had on Tuesday hinted that the lending roadmap would be ready by February-March. Meanwhile, the MSME sector got some breather from RBI, which gave an extension of 180 days to make repayments for GST-registered MSMEs, which have aggregate standard exposure of up to Rs 25 crore with amounts overdue as on September 2017, without a downgrade in asset classification.
“The government acknowledges that there were disruptions in cash flow of the small companies,” RBI deputy governor N S Vishwanathan said on Wednesday at a press conference. Businesses were also complaining that despite the thrust from the government, banks were still reluctant to lend to the MSME sector.