Moneycontrol PRO
UPCOMING EVENT: We will crown India’s Sustainability Champions at the first Sustainability100+ Awards tomorrow. Be there!
you are here: HomeNewsBusiness

COVID impact: SIDBI launches web module for MSMEs to prepare loan recast

MSMEs have been hit hard by the pandemic and many of these firms are on the verge of closure.

November 30, 2020 / 07:11 PM IST
Representative image

Representative image

Small Industries Development Bank of India (SIDBI) has launched a web portal to help MSMEs take benefit of the Reserve Bank of India’s (RBI) MSME restructuring guideline.

With the help of this portal, MSMEs will be able to prepare restructuring proposals by keying in only the most essential data of their past financials, future projections and restructuring requirement, SIDBI said.

The proposal prepared can be submitted online to the banks and reports can also be generated for submission to banks through email or in hard copies.

The RBI had launched the restructuring scheme for MSMEs till December 2020 but later extended it to March.

Although the RBI has extended the scope of ongoing one-time restructuring for COVID-hot accounts till March 31, 2021, many MSMEs find it difficult to prepare the restructuring proposals on their own, SIDBI said.

“The module makes it easier to compare different options of restructuring as well as reduces the turn-around time,” it noted.

MSMEs have been hit hard by the pandemic pushing many of these firms to the verge of closure. The government launched a Rs 3 lakh crore emergency credit scheme while the RBI announced a one-time loan recast to help this segment.

ECLGS support enough

In a separate note, rating agency CRISIL said the Emergency Credit Line Guarantee Scheme (ECLGS 2.0) extended under Atmanirbhar Bharat 3.0 to eligible companies in 26 stressed sectors identified by the KV Kamath Committee, and also to the healthcare sector, can potentially infuse Rs 40,000 crore liquidity for CRISIL-rated eligible companies.

That will be sufficient to help companies, including those hit by a sharp decline in cash flows because of the pandemic, to overcome liquidity pressures, according to a CRISIL study.

Under ECLGS 2.0, companies with outstanding loans of between Rs 50 crore and Rs 500 crore are eligible for additional credit of up to 20 percent of their outstanding debt as on February 29, 2020. The tenure of such additional credit will be five years, including a one-year moratorium on principal repayment.

Out of CRISIL’s rated portfolio, as many as 1,414 companies from 27 sectors, including healthcare, were found eligible for ECLGS 2.0. Their total outstanding debt stood at around Rs 2 lakh crore as on February 29, 2020, the agency said.

Moneycontrol News
first published: Nov 30, 2020 07:08 pm