WB ranks India among top 5 in terms of private investment in infra (See 'Corp Brief') Survey: India should focus on application-based AI tools (See 'Corp Brief') FEMA - Statement recorded u/s 37 of FEMA did not amount to confession of criminal offence: HC (See 'Legal Desk') UNCTAD ranks India as leading economy in trade partner diversification (See 'Corp Brief') Manufacturing GVA grows by 7.72% in Q1 and 9.1% in Q2 (See 'Corp Brief') SEBI - In absence of explicit permission/exemption with respect to RFQ requirements, Noticee should have suspended its services if it was not feasible to engage large amounts of funds into working capital: SEBI (See 'Legal Desk') The Securities Markets Code, 2025: Strengthened Enforcement, Weakened Accountability? (See 'CORP EINSICHT') India far more urban in functional terms than official definitions: Survey (See 'Corp Brief') Economic Survey lays stress on swadeshi for strategic resilience (See 'Corp Brief') 5G services now available in over 99% districts (See 'Corp Brief') Survey asks States to focus on entrepreneurial policy making (See 'Corp Brief') Health insurance accounts for 41% of Gross Domestic Premium (See 'Corp Brief') IBC - NCLT can't decide title disputes over assets, including IPRs such as trademarks, unless they have direct & proximate nexus with insolvency resolution process: SC (See 'Legal Desk') 'Vande Mataram', 'Anand Math', 'Atulya Bharat' tunes to regale audience at Beating Retreat ceremony (See 'Corp Brief') Youth Lead Democracy: Model Youth Gram Sabha Awards Conferred in Delhi (See 'Corp Brief') Misc - Execution sale during pendency of insolvency proceedings held void; Official Receiver can seek annulment even without expressly invoking Section 56: HC (See 'Legal Desk') Union fisheries secretary engages shrimp farmers, boosts scientific innovation in aquaculture (See 'Corp Brief') Learjet 45 aircraft VT-SSK crash at Baramati Airport of M/s VSR Ventures PVT LTD (See 'Corp Brief') SAFEMA - contravention of Sections 3(d) and 7(1)(a)can be established based on documentary evidence & circumstantial corroboration applying the standard of preponderance of probabilities, even in absence of direct evidence of cash payment: SAFEMA (See 'Legal Desk') CCI nod to acquisition of certain shareholding of Toyota Industries Corp (See 'Corp Brief') IBC - Resolution Professionals under IBC are public servants under Prevention of Corruption Act: HC (See 'Legal Desk') Department of Posts signs Agreement with Stock Holding Services Limited for access to capital market services (See 'Corp Brief') SEBI - Failure to make timely disclosure of material developments relating to a proposed scheme of arrangement & delayed disclosure of outcome of board meeting constitutes violation of LODR Regulations: SEBI (See 'Legal Desk') MSME beneficiaries invited as special guests for R-Day celebrations (See 'Corp Brief') PMLA - Offence of money-laundering is independent offence regarding process or activity connected with proceeds of crime which had been derived or obtained as result of criminal activity relating to or in relation to scheduled offence: SAFEMA (See 'Legal Desk')

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.