SME Times News Bureau | 03 Jan, 2019
The Reserve Bank of India (RBI) on Wednesday set up an
expert committee headed by former SEBI Chairman U.K. Sinha to look into challenges
facing the MSME sector, particularly in relation to availability of finance.
A statement said that the committee would propose long-term
solutions for the economic and financial sustainability of the micro, small and
medium enterprises (MSME) sector currently plagued by liquidity and other
issues.
The committee will examine the factors affecting the timely
and adequate availability of finance to the sector, as well as study the global
best practices regarding MSMEs and recommend its adoption in India.
The move comes a day after the RBI permitted a one-time
restructuring of existing MSME loans that are in default but
"standard" as on January 1, 2019, without an asset classification
downgrade.
To be eligible for the scheme, the aggregate exposure,
including non-fund based facilities of banks and non-banking finance companies
(NBFCs), to an MSME borrower should not exceed Rs 25 crore as on January 1,
2019.
"It has been considered necessary that a comprehensive
review is undertaken to identify causes and propose long term solutions, for
the economic and financial sustainability of the MSME sector," the
statement said.
"Towards this end, it was announced in the Fifth
Bi-Monthly Monetary Policy Statement for 2018-19, dated December 5, 2018, that
the RBI will constitute an Expert Committee on Micro, Small and Medium
Enterprises."
The panel will also review the current institutional
framework in place to support the MSME sector, study the impact of the recent
economic reforms on the sector and identify the structural problems affecting its
growth, the statement added.
Besides Sinha as the Chair, the committee will have the
Additional Secretary, Development Commissioner MSME Ram Mohan Mishra, Financial
Services Joint Secretary Pankaj Jain, State Bank of India MD P.K. Gupta, ICICI
Bank Executive Director Anup Bagchi, IIM-Ahmedabad Professor Abhiman Das,
iSPIRT Foundation Co-founder Sharad Sharma and Dvara Trust Chairperson Bindu
Ananth.
Support for MSMEs was one among the contentious issues
between RBI and the government leading to the abrupt resignation of previous
RBI Governor Urjit Patel last month and the immediate appontment of his
successor Shaktikanta Das, who had earlier retired as the Union Economic
Affairs Secretary.
Earlier on Wednesday, Das announced he will hold talks with
representatives from the MSME and NBFC segments next week.