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RBI trains 11k bank officers on MSME credit


Central bank has provided special training to nearly 11,000 officers at various commercial banks on lending to micro, small and medium enterprises. This training has been provided to officers working at nearly 3,000 bank branches covering all districts in India through more than 2,000 special workshops in the last three years.

These are mostly specialised bank branches catering to the MSME sector where this multi-level training has been provided, covering branch managers, senior officers and even faculty members of staff colleges who can further pass on the training to the bank employees.

Most importantly, the training exercise was executed in consultation with the government, including with the active involvement of the MSME ministry and the RBI's objective has been to create a conducive environment to help these small entrepreneurs and companies avail easy and faster credit.


The officers have also been provided special kits to help their banks extend more credit to MSMEs.

The Micro, Small and Medium Enterprises (MSME) lending has been exempted from most of the restrictions, including those relating to the stressed assets, and several steps have been taken by the RBI to ease credit flow to this sector and to ensure their faster 'formalisation' to bring them on board the new GST regime that will help them further in availing the loans.

While much has been written about differences between the RBI and the government, sources said the facts and the data show there are hardly any significant issues that are being faced by MSMEs due to policy or regulatory matters. They cited several steps taken in the recent past by the RBI, in consultation with the government, for facilitating easier access and availability of credit to the MSME sector, including the 'Resolution of Stressed Assets-Revised Framework (RSA-RF)' of February 12, 2018.

This framework has been carefully calibrated to exclude loans availed by MSME units up to Rs 25 crore from its purview, which nearly covers the entire spectrum of the MSME borrowers. Besides, this remains in line with the earlier government policy for the benefit of MSMEs.

The average outstanding loan size of the MSMEs being 2.7 lakh, 26 lakh and 92 lakhs respectively, almost all the MSME loans are out of the purview of the February 12 circular, while the earlier 'specially carved out' rectification process for the MSMS sector remains in force that remains borrower-driven. The officials also pointed at inclusion of a separate sub-target of 7.5 per cent under Priority Sector Lending for the micro sector and said the target has been achieved by most banks, including those facing 'prompt corrective action'.


Now, this target has also been made mandatory for foreign banks with 20 or more branches in India.

Besides, caps have been removed on loans to MSMEs to encourage banks to go beyond the earlier limits in such lending.

To ensure timely availability of funds to the MSME sector, the RBI has also facilitated the setting up of Electronic Bill Factoring Exchanges in the country. These exchanges provide for swift discounting of MSME bills and help MSMEs raise funds without delay.

The Non-Performing Assets norms have also been relaxed for the MSME sector to help them cope up with challenges following implementation of new reforms.

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