The Reserve Bank of India (RBI) on June 11, 2024, updated the Master Direction - Lending to Micro, Small & Medium Enterprises (MSME) Sector.
The following amendments have been stated:
The Para 4.4 has been substituted with the following:
“4.4 Streamlining the flow of credit to Micro and Small Enterprises (MSEs) for facilitating timely and adequate credit flow during their ‘Life Cycle’:
In order to provide timely financial support to Micro and Small enterprises facing financial difficulties during their ‘Life Cycle’, detailed guidelines were issued to banks vide circular FIDD.MSME & NFS.BC.No.60/06.02.31/2015-16 dated August 27, 2015 on the captioned subject. In accordance with the guidelines, banks shall review and tune their lending policies to the MSE sector by incorporating therein the following provisions so as to facilitate timely and adequate availability of credit to viable MSE borrowers especially during the need of funds in unforeseen circumstances:
To extend standby credit facility in case of term loans.
Additional working capital to meet with emergent needs of MSE units.
Mid-term review of the regular working capital limits, where banks are convinced that changes in the demand pattern of MSE borrowers require increasing the existing credit limits of the MSEs, every year based on the actual sales of the previous year.
The timeline for credit decisions for loans up to ₹25 lakh to units in the MSE borrowers shall not be more than 14 working days. For loans above the aforementioned limit, timelines shall be as per the Board approved sanction time norms. All credit related information pertaining to MSMEs including timelines for credit decisions, indicative document checklist etc., shall be displayed under a separate tab prominently on the bank's website.”
Please view the document for further details.
[Circular No. RBI/FIDD/2017-2018/56 Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18]
