Railways launches Special Drive for Disinfection of Drinking Water Tanks (See 'Corp Brief') Regional Manthan Conference on Road Safety held (See 'Corp Brief') Minister highlights successful Blended Green-Finance Framework for Land Restoration (See 'Corp Brief') IPR - Mere addition of descriptive suffix or insertion of corporate descriptors in trade name, does not sufficiently distinguish, particularly when competing goods target same class of consumers: HC (See 'Legal Desk') India Post accelerates Digital and Infrastructure Transformation with Upgraded Dak MITRA (See 'Corp Brief') NA-Allocated Talabira II & III Coal Mines mark Record Production in FY 2025-26 (See 'Corp Brief') MeitY Startup Hub, MSH Emerging as Key National Enabler for India's Startup (See 'Corp Brief') SEBI - Bail denied where alleged offences involve large-scale cheating of investors and mobilisation of public funds, causing harm to individuals as well as to public confidence & economy: HC (See 'Legal Desk') India-Cambodia Bilateral Trade grows over 36% to USD 406.78 Million (See 'Corp Brief') India restored 21.76 mn ha land during 2011-2020: Yadav (See 'Corp Brief') IBC - Extraordinary remedies such as forensic audit u/s 241-242 of Companies Act cannot be granted on mere allegations or shareholder distrust: NCLT (See 'Legal Desk') NCSK distributes Appreciation Certificates among Outstanding Safai Karamcharis (See 'Corp Brief') Stakeholders explore actionable measures to promote inclusivity across financial institutions (See 'Corp Brief') SEBI - Writ court's intervention not needed in respect of a preliminary SCN proposing to conduct an inquiry & giving opportunity to petitioner to present objections: HC (See 'Legal Desk') EPFO urges establishments to utilize Employees' Enrolment Campaign, 2026 (See 'Corp Brief') SEBI - Regulator cannot substitute its own commercial judgment for business decision of a company in relation to funding its wholly owned subsidiary: SAT (See 'Legal Desk') MoS delivers inaugural address at BRICS Science Ministerial Meet at Chennai (See 'Corp Brief') SEBI - Noticee cannot be held liable for carrying out unregistered investment advisory activities or for promising assured returns where evidence does not exist to show that Noticee conducted core advisory activities: SEBI (See 'Legal Desk') Procurement of tyres: CCI imposes penalty on Rekha Agencies and SS Marketing (See 'Corp Brief') Sonowal inaugurates Rs 428 Crore Projects at Paradip Port (See 'Corp Brief') Committee discusses Next Phase of UDAN & strengthening of Pilot Training Ecosystem (See 'Corp Brief') IPR - Trademark registration is liable for cancellation u/s 57(2) of Trade Marks Act if it is made without sufficient cause: HC (See 'Legal Desk') Office of Pr. CCA, Delhi, celebrates National Senior Citizens Day (See 'Corp Brief') SARFAESI - In respect of monies recoverable from a defaulting entity, the dues payable to a bank, being financial creditor, do not take precedence, over dues owed to the EPFO: HC (See 'Legal Desk') Tete-a-tete around AI in banking sector often begins with algorithms (See CORP EINSICHT)

Print

Rs 25 Lakh loans, decision in 14 days - Govt moves to enhance credit access for MSMEs

Published: Mar 12, 2025

By TIOLCorplaws News Service

NEW DELHI, MAR 12, 2025: THE Reserve Bank of India (RBI), as a regulator, provides an enabling framework for Regulated Entities (REs) to cater to the financing needs of various sectors of the economy within the prudential boundaries. Further, credit related matters of REs are largely deregulated and the same are governed by the Board approved loan policies of the REs framed under the ambit of relevant regulatory and statutory requirements and terms and conditions of the loan agreement between the borrower and the RE. Banks have been advised to furnish the MSME borrowers with an indicative checklist of documents required for processing the loan application at the time of applying for the loan. For loans up to Rs.25 lakh to units in the Micro and Small Enterprises (MSE) borrowers, banks are advised that the timelines for credit decisions shall not be more than 14 working days. Various measures have been taken for increasing access to credit and finance for MSMEs.

These include:

- Specific targets for lending to MSME sector have been prescribed in Priority Sector guidelines dated 4.9.2020.

- SCBs have been mandated not to accept collateral security in the case of loans up to Rs.10 lakh extended to units in the MSE sector.

- Computation of working capital requirements of MSE units to be minimum 20% of the projected annual turnover for borrowal limits up to Rs.5 crore.

- Trade Receivables Discounting System (TReDS) has been operationalized to address the problem of delayed payments to MSMEs.

- Banks have been advised to link interest rates of loans extended to MSMEs to an external benchmark.

- RBI's Account Aggregator (AA) framework and proposed Third Cohort under Regulatory Sandbox (RS) for MSME Lending is expected to spur innovations that can fill the lending gap for MSMEs through the use of technology and data analytics.

- RBI's Unified Lending Interface (ULI) will make credit more accessible to underserved populations.

- GST Sahay App of SIDBI facilitates 'on tap' invoice-based (cash flow based) small value credit to micro enterprises as a paperless journey.

- Udyam Assist Platform (UAP) to register Informal Micro Enterprises (IMEs) i.e. micro enterprises not registered under the GST regime.

- Under Pradhan Mantri Mudra Yojna (PMMY), Government has taken various steps towards effective implementation of the Scheme. These include publicity campaigns, simplification of application form, Credit Guarantee Scheme, nomination of Mudra Nodal Officer, frequent reviews at various levels to monitor the achievement against allocated target, etc. Online platforms like Jansamarth portal provide a quick and efficient way to get loans for individuals and businesses, with approvals based on digital evaluation of the applicant's data.

- PSBLoansin59minutes enables MSMEs to obtain In-principle approval of loans from lenders onboarded on the platform.

- SAMADHAAN Portal launched for monitoring of outstanding dues to the MSEs from the buyers of goods and services xiii. The Government of India has launched various Credit Guarantee schemes for the benefit of MSMEs.

- New Credit Assessment Model based on the scoring of digital footprints of MSMEs developed by PSBs will leverage the digitally fetched and verifiable data available in the ecosystem and devise automated journeys for MSME Loan appraisal using objective decisioning for all loan applications and model-based limit assessment for MSME borrowers.

This information was given by Minister of State in the Ministry of Finance, Pankaj Chaudhary in a written reply to a question in Rajya Sabha yesterday.

TIOL CORP SEARCH

TIOL GROUP WEBSITES

taxindiaonline
taxindiainternational
tioltube
TKF
TIOLawards
A TIOL Website. Copyright © 2025 TIOLcorplaws.com All rights reserved.