RBI announces relief measures for MSME sector

The central bank gave them an additional 180 days to clear their dues to banks.

The Reserve Bank of India has announced measures to bring relief to micro, small and medium enterprises (MSMEs), which are impacted by GST rollout and the note ban. 
 
The central bank gave them an additional 180 days to clear their dues to banks.
 
The formalisation of business through registration under GST had adversely impacted the cash flows of the smaller entities during the transition phase with consequent difficulties in meeting their repayment obligations to banks and non-banking financial companies (NBFCs). 
 
"As a measure of support to these entities in their transition to a formalised business environment, it has been decided that the exposure of banks and NBFCs to a borrower classified as micro, small and medium enterprise shall continue to be classified as a standard asset whose amount does not exceed Rs 250 million as on 31 January 31 2018 and whose account was standard as on 31 August 2017." 
 
As MSME happens to be the largest sector, the government provided impetus by announcing corporate tax cut to 25 per cent from its earlier 30 per cent for the enterprises with a turnover of Rs 250 crore in its Budget proposals last week.
 
Source: Media reports

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