Distressed asset fund’ for MSMEs

Why is it in the news?
    • A Reserve Bank of India (RBI) committee headed by U.K. Sinha has suggested a Rs 5,000 crore stressed asset fund for domestic MSMEs.
    • It is proposed in relief to small businesses hurt by demonetization, the goods and services tax and an ongoing liquidity crunch.
 
More in the news
    • The committee to study the problems faced by MSMEs.
    • The fund will assist units in a cluster where there is a change in the external environment such as plastic ban.
    • This would be of significant size which makes equity investments that help unlock debt or help revive sick units.
    • Other Key Suggestions of the Panel:
      (1) The RBI should increase the limit for non-collateralised loans to ₹20 lakh. This would address a significant proportion of the sector needs.
      (2) In addition, there should be revision in loan limit sanctioned under MUDRA by the Finance Ministry to ₹20 lakh from ₹10 lakh.
      (3Banks that wish to specialise in MSME lending, their sub-targets for farm loans under the priority sector lender could be waived off.
     
    Source
    The Hindu.




    Posted by Jawwad Kazi on 26th Jun 2019
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