MSME covid relief - RBI

 RBI has vide its circular dated 4th June, 2021 enhanced the covid relief to the MSME sector by increasing the aggregate credit exposure from Rs.25 crores to Rs.50 crores. Under the resolution framework for Covid stress, banks can now consider giving higher reliefs to the MSME sector. This is a welcome move. Read on 

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12105&Mode=0

A reference is invited to the circular DOR.STR.REC.12/21.04.048/2021-22 on “Resolution Framework 2.0 – Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs)” dated May 5, 2021.

2. Clause 2 of the above circular specifies the eligibility conditions for MSME accounts to be considered for restructuring under the framework, which inter alia include sub-clause (iii) which states that the aggregate exposure, including non-fund based facilities, of all lending institutions to the MSME borrower should not exceed ₹25 crore as on March 31, 2021.

3. Based on a review, it has been decided to enhance the above limit from ₹25 crore to ₹50 crore.

4. Consequently, clause 2(v) would stand modified as under:

“(v) The borrower’s account was not restructured in terms of the circulars DOR.No.BP.BC/4/21.04.048/2020-21 dated August 6, 2020; DOR.No.BP.BC.34/21.04.048/2019-20 dated February 11, 2020; or DBR.No.BP.BC.18/21.04.048/2018-19 dated January 1, 2019 (collectively referred to as MSME restructuring circulars) or the circular DOR.No.BP.BC/3/21.04.048/2020-21 dated August 6, 2020 on “Resolution Framework for COVID-19-related Stress.”