MSME Benefits: Give relief to MSMEs benefited under RBI's Restructuring Framework 1.0
MSME Benefits: Give relief to MSMEs benefited under RBI's Restructuring Framework 1.0

The Finance Industry Development Council (FIDC) has sought loan restructuring for the micro, small and medium enterprises (MSME) that benefited from the previous loan restructuring framework provided by the Reserve Bank of India amid the pandemic.

In a letter to Reserve Bank of India Governor Shaktikanta Das, Mahesh Thakkar, the Director-General of FIDC said that the second wave of the Covid pandemic has created new uncertainties in the country's economic revival and MSME customers are the most affected category of borrowers, especially in sectors such as education (school and school bus operators), transportation (staff bus and route bus operators) and tourism (taxi operators, travel operators).

He noted that in the earlier framework, restructuring was done for MSMEs also based on expectations that market conditions would improve and should get to normal by March, 2021.

These customers have seen their prospects of revival, which looked promising in the past quarter, suddenly and substantially negatively impacted due to the second wave. As per certain research reports, 40 percent of trucks are stranded due to lockdowns and freight rates down by 20 percent in 75 major routes in the country thereby impacting the livelihoods of millions of truck operators and drivers.

Among other recommendations, the NBFC body has also suggested the inclusion of hybrid use of tractors under the definition of small businesses, thereby allowing restructuring of such mixed-use tractor (equipment) loans.

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