No Bad Loan: No growth in MSME bad loans: RBI

keypoints:

1. The RBI has allayed fears of rising bad loans in MSMEs due to the second wave of Covid-19. 
2. The government has provided financial assistance to MSMEs.
3. Emergency Credit Line Guarantee Scheme.

The RBI has allayed fears of rising bad loans in MSMEs due to the second wave of Covid-19. The government has provided financial assistance to MSMEs through measures like the Emergency Credit Line Guarantee Scheme. As a result, loan disbursement had increased from Rs 6.8 lakh crore in 2019-20 to Rs 9.5 lakh crore in 2020-21. At the same time, the rate of weakness in asset quality has increased from 12 per cent in December 2020 to 12.6 per cent.

“There is no crisis at present,” said RBI Deputy Governor Mukesh Jain. Despite the increase in loan restructuring process among SME loan holders and becoming NPAs, the condition of bad loans is not serious.

The RBI is constantly monitoring the RBI regulated companies. The asset quality of large NBFCs is also being tested. So that the situation can be brought under control. MSME’s NPA level rose to 12.6 per cent in the March quarter. Following the first wave of Covid, the RBI directed all banks and NBFCs to identify distressed loans.

1.65 lakh crore loan ECLGS guarantee MSME

central recession According to Narayan Rane, the government has extended a total of 1.09 crore MSME loan holders under ECLGS till July 2. a 1.65 lakh crore loan guarantee. Loans will be allotted to one-sixth of the approved MSME borrowers. There are a total of 63 million MSMEs registered in the country. During May-July, MSME’s Rs. The remaining Rs 55,863.30 crore was disposed of.

Loan demand has increased in the

MSME segment Loan demand has increased in the MSME segment. In the last financial year, under ECLG, Rs. A 9.5 lakh crore loan has been allotted to MSMEs. In 2019-20, Rs. 6.8 lakh crore loans were allotted. In the commercial segment, by March 2021, Rs. 74.36 lakh crore. At the same time, loans worth Rs 20.21 lakh crore were disbursed in the MSME segment. In April 2020, due to Kovid, the process of loan disbursement to MSMEs was reduced by 90%.