RBI constitutes expert committee on MSMEs under ex-Sebi chief U.K. Sinha
A day after releasing guidelines on restructuring of advances to MSMEs, the Reserve Bank of India (RBI) on Wednesday set up eight-member expert committee under former Sebi chairman U.K. Sinha to propose long term solutions for the economic and financial sustainability of the sector.
"Considering the importance of the Micro, Small and Medium Enterprises (MSMEs) in the Indian economy, it is essential to understand the structural bottlenecks and factors affecting the performance of the sector," the central bank said in a statement.
The expert committee will submit its report by the end of June, 2019, the apex bank said.
In the Fifth Bi-Monthly Monetary Policy Statement for 2018-19, the RBI had announced to constitute an expert committee on micro, small and medium enterprises.
The committee will review the current institutional framework in place to support the MSME sector and will study the impact of the recent economic reforms on the sector and identify the structural problems affecting its growth.
To examine the factors affecting the timely and adequate availability of finance to the sector and study the global best practices with respect to MSMEs and recommend its adoption in India, are other important issues which the committee will look into.
The panel will also review the existing MSME focused policies and its impact on the sector and propose measures for leveraging technology in accelerating growth of the sector.
Earlier on Tuesday, the RBI announced a one-time restructuring of existing loans to MSMEs 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 NBFCs, to a borrower should not exceed Rs 25 crore as on January 1, 2019. The restructuring has to be implemented by March 31, 2020.