Circular No. ES/85/2015-16 March 18, 2016
To: Members of the Council
Sub: RBI releases Revised Framework for Revival & Rehabilitation of MSMEs
The Government of India, vide their Gazette Notification dated May 29, 2015 had notified a ‘Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises in order to provide a simpler and faster mechanism to address the stress in the accounts of MSMEs and to facilitate the promotion and development of MSMEs.
However, certain changes in the captioned framework have been carried out in consultation with the Government of India, Ministry of MSME in order to make it compatible with the existing regulatory guidelines on ‘Income Recognition, Asset Classification and provisioning pertaining to Advances’ issued to banks by RBI.
The Reserve Bank of India (RBI) has now come up with a revised guidelines for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs) vide RBI/2015-16/338 dated March 17, 2016. Accordingly, a revised Framework along with operating instructions is furnished in the Annex (given in the Notification). The Board approved policy to operationalize the Framework may be put in place by the banks not later than June 30, 2016.
According to the revised framework, the provisions shall be applicable to MSMEs having loan limits up to Rs.25 crore, including accounts under consortium or multiple banking arrangements (MBA).
For more information on the Revised Framework you may follow the link given above.
Thanking you,
V.ANIL KUMAR
EXECUTIVE DIRECTOR
