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RBI asks banks to consider restructuring of loans for MSMEs

New Delhi, May 31 (KNN) The Reserve Bank of India (RBI) has asked banks that they should consider restructuring of loans whenever an MSME unit approaches them, and should also handhold them in difficult times.
 
“We told the banks that whenever the entrepreneurs approach the bank on restructuring of the loans, wherever there is merit, the bank should consider. In case, if any unit becomes NPA (non-performing assets) to avoid a situation, banks have to have a system on MSME rehabilitation scheme where they have to attend to the unit to do a hand-holding for a certain period of time and guide the unit to come out of the temporary crisis,” General Manager, Rural Planning and Credit Department (RPCD), RBI, Sonali Sengupta has said.
 
While addressing the town hall meeting here organised by RBI under the aegis of industry body FISME, Sengupta said that the banks are free to give collateral depending upon the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
 
“So, as of now, all the banks are giving collateral free loan wherever CGTMSE coverage is there up to Rs one crore. We have also told the banks in order to provide the single window approach; a composite loan comprising terms as well as working capital loan up to Rs one crore. So there is a single window approach,” she said.
 
Banks are free to give collateral depending upon the CGTMSE.
 
She said recently, the RBI has told the banks that wherever CGTMSE coverage is available, they can consider giving differential rate of interest because rate of interest is also one of issue which all the MSME entrepreneurs complain is very high.
 
RBI organized two meetings in the Delhi region this month. The main objective of the meeting was to discuss the grievances and feedback that the small entrepreneurs face with the public as well as private sector banks.