MSMEs seek direct interest subvention benefit

The Reserve Bank of India (RBI) should allow Micro, Small and Medium-scale Enterprises (MSMEs) to claim 2 % interest subvention directly for loans availed between February 2, 2018 and March 31, 2020 from banks, said the Coimbatore Compressor Industries’ Association.

In a memoradum to the RBI, the Association president M. Raveendran said the Central Government announced the scheme for MSMEs two years ago and the RBI issued a circular last February outlining guidelines to the banks for the scheme. Recently, the RBI issued another circular saying that co-operative banks will also implement the scheme and said the validity of the scheme has been extended till March 31 next year.

In a reply to the Association, the Small Industries Development Bank of India said that ₹825 crore was disbursed so far under the scheme in the country. But, no MSME entrepreneur in Coimbatore has benefited, claimed Mr. Raveendran. “It is the duty of the bankers concerned to claim the 2 % interest amount through SIDBI and disburse it to the eligible MSMEs,” he said.

Bankers here should take steps to pass on the benefits of the schemes to the MSMEs.

Mr. Raveendran urged the RBI to clarify whether the scheme would be implemented by all scheduled commercial banks and eligible MSMEs till the end of March next year, to look at disbursing the benefits directly to the MSMEs, and also clarify on fresh loans. Bankers said that interest subvention was eligible only for fresh loans obtained after November 2. The overdraft facility was subjected to renewal by the banker every year.

“We request the RBI to consider the overdraft loan as a fresh loan and extend interest subvention from the renewal date,” he added.

This article is closed for comments.
Please Email the Editor

Printable version | Dec 3, 2020 4:13:30 AM |

Next Story