Shaktikanta Das: RBI’s measures to support ECLGS and debt programs will help ease Covid stress for MSMEs

Credit and financing for MSMEs: Monetary and regulatory measures taken by the Reserve Bank of India (RBI) to support the government’s ECLGS program and subordinated debt program will help ease tensions in the MSME sector and open up new business opportunities, the governor said on Thursday. of the central bank, Shakti Kanta Das. Addressing the 185th Founding Day of the Bombay Chamber of Commerce and Industry (BCC), Das added that the MSME sector has become the growth engine of the economy even though it has been made particularly vulnerable by the pandemic, which requires concerted efforts to combat stress and concentration. on the revival of the sector.

“In this regard, the ECLGS and the Credit Guarantee Scheme for Subordinated Debt have been introduced by the government. These were duly supported by various RBI monetary and regulatory measures in the form of interest rate cuts, higher structural and sustainable liquidity, debt service moratorium, a moratorium on asset classification, a loan restructuring program and a CRR exemption on loans disbursed to new MSME borrowers. “Das said.

Under the ECLGS scheme, the banks had sanctioned Rs 2.39 lakh crore on a corpus of Rs 3 lakh crore as of January 29, 2021. This amount was up from the sanctioned loan amount of Rs 2.14 lakh crore at 90 57,300 borrowers as of January 8, 2021. , according to data from the Ministry of Finance. Regarding the subordinated debt scheme, the number of beneficiaries as of February 4, 2021 stood at only 272 amounting to Rs 30.84 crore, according to data shared by MSME Minister Nitin Gadkari in a written response. to a question in the Lok sabha. Launched in June 2020 and operationalized in August, the program was intended to benefit 2 lakh MSMEs who are NPAs or stressed.

“Going forward, RBI stands ready to support SIDBI for greater credit penetration in the MSME sector,” Das said.

Also Read: MSME Trade Credit Demands Hover Around Pre-Covid Level After Peaking in June Following ECLGS Launch

Covid had also had a significant impact on India’s exports. The country has been the worst performer in merchandise exports compared to other Asian countries including China, South Korea, Vietnam, Indonesia, Malaysia and even Bangladesh. In the March-October period, exports saw year-on-year growth in September alone, even as China and Vietnam saw growth in six of those eight months. By contrast, Bangladesh saw growth in three months, Financial Express reported in December citing official data from those countries. The share of MSMEs in Indian exports is 48%.

“Our goal is to prevent excessive exchange rate volatility. Even in the times of Covid, the fluctuation of the Rupee has been in a particular range. It reached around Rs 76.90 for the dollar briefly at the start of Covid. Thus, our goal is to prevent excessive exchange rate volatility so that exporters and importers who are dependent on the exchange rate can make informed decisions. Once we avoid volatility, the (export) concerns of all sectors, including MSMEs, will be resolved,” Das added. At the start of the pandemic, the rupee closed at Rs 75.68 to the dollar on March 31 and peaked at Rs 76.90.

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