Mumbai, Jan 2 (IANS) The Reserve Bank of India (RBI) on Wednesday set up an expert committee to 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.
An RBI statement said that the committee headed by former Securities and Exchange Board (Sebi) Chairman U.K. Sinha 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.
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz
This website uses cookies.
