NE BUSINESS BUREU
MUMBAI, JUN 4
The RBI on Friday expanded the coverage of Resolution Framework 2.0 by doubling the maximum aggregate exposure threshold to Rs 50 crore for MSMEs, non-MSME small businesses and individuals for business purposes.
On May 2, RBI had announced Resolution Framework 2.0 for debt restructuring of stressed individuals, small businesses and MSMEs having aggregate exposure of up to Rs 25 crore.
“With a view to enabling a larger set of borrowers to avail of the benefits under Resolution Framework 2.0, it has been decided to expand the coverage of borrowers under the scheme by enhancing the maximum aggregate exposure threshold from Rs 25 crore to Rs 50 crore for MSMEs, non-MSME small businesses and loans to individuals for business purpose,” RBI Governor Shaktikanta Das said while announcing the monetary policy.
Media interaction on RBI’s Monetary Policy by Shri Shaktikanta Das, Governor, Reserve Bank of India https://t.co/9XtIPQHS5q
— ReserveBankOfIndia (@RBI) June 4, 2021
Under the current resolution framework, restructuring should be invoked up to September 30, 2021 and shall have to be implemented within 90 days after invocation, RBI had said in May.
Last week, Indian Banks Association (IBA) had said state-owned banks have formulated a templated approach for restructuring of loans under Resolution Framework 2.0.
Highlights of Monetary Policy announcement made by @RBI Governor @DasShaktikanta on June 4, 2021
#rbitoday #rbigovernor#rbikehtahai #RBIPolicyhttps://t.co/mKPAIp5rA3 pic.twitter.com/FvnbkJqFBw— RBI Says (@RBIsays) June 4, 2021
The Reserve Bank of India on Friday left the repo rate unchanged at 4 per cent.
The six-member Monetary Policy Committee also decided unanimously to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.
Pro-industry measures to help businesses to bounce back from COVID impact: AEPC
Apparel exporters body Apparel Export Promotion Corporation (AEPC) on Friday welcomed RBI’s bi-monthly monetary policy review stating that the pro-industry measures will facilitate businesses to bounce back from the impact of COVID-19 pandemic.
The Reserve Bank of India (RBI) decided to leave the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy faces the heat of the second COVID wave.
“As India is recovering from the dent caused by the second wave, which has hampered the economic activities, I am confident that the special measures, as part of the monetary policy, will support the industry to come out of this crisis,” Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said in a statement.
About a special liquidity facility of Rs 16,000 crore to SIDBI, he said this will support the MSMEs for easier access to credit.
The unchanged policy repo rate at 4 per cent and reverse repo rate at 3.35 per cent will also lead to a stable rate regime, he added.
“Another major decision that will go a long way in protecting the Indian economy is the widening of the eligible beneficiaries under Resolution Framework 2.0 by enhancing the maximum aggregate exposure threshold from Rs 25 crore to Rs 50 crore for MSMEs. This will support the MSMEs, which are under stress and enable a larger set of borrowers to avail the benefits,” he said.
TEA welcomes RBI announcements
The Tirupur Exporters’ Association on Friday welcomed the enhancement of the exposure thresholds limit under the Resolution Framework 2.0 announced by the RBI, from Rs 25 Crore to Rs 50 Crore for MSMEs and others.
TEA President Raja M Shanmugham, in a release, also welcomed the measure to include the flow of credit Rs 15,000 Crore to the SIDBI to further support to MSMEs, which will be beneficial to Tirupur units.
He also lauded the decision to extend a special liquidity facility of Rs 16,000 Crore to SIDBI for on lending/refinancing through novel models and structures and unchanged repo rate at four per cent.
Shanmugham thanked RBI Governor Shaktikanta Das for the financial measure by enlarging the coverage and support the MSMEs to get revived and witness growth strategy.
