Revised RBI rules for rehab of MSME’s to reduce Bad loans

The biggest problem faced by the Indian banking sector in the recent days is the piling up of Bad loans. The RBI has been taking various measures to reform the banking sector and bring down the NPA’s. As a part of its efforts, it has revised the Rules for rehabilitation of MSME’s.

Flash points

• FICCI has commented on RBI’s move calling it to be a rehabilitation measure for MSME’s
• The measures include formation of special mention account and committee at the district level to manage stressed accounts
• It will help in reducing the NPA’s of MSME’s
• The new framework is applicable to MSME’s having loan limits of upto 25 crores
• The framework proposed will be institutionalized by MSME’s before June 30, 2016

Key points

• FICCI- Federation of Indian Chambers of Commerce & Industry
• FICCI president- Sanjay Bhatia
• RBI governor- Raghuram Rajan
• RBI headquarters- Mumbai