FISME writes to RBI seeking to defer payment of instalments under ECLGS
New Delhi, May 27 (KNN) The Federation of Indian Small and Medium Enterprises (FISME) has written to the Reserve Bank of India (RBI) seeking to defer payment of instalments under the Emergency Credit Line Guarantee Scheme (ECLGS).
In its letter dated May 21, FISME, the umbrella body of MSME associations also said that with our experience based on ground feed-back, we also urge you to quickly create a task force with just the relevant stakeholders and the beneficiaries.
''When it comes to crunch, the first expense that is cut is payrolls. It is our humble prayer to RBI and the GoI, not to let an MSME close down until all efforts to save it have failed. The alternative is scary,'' FISME said.
''Along with tens and thousands of these small establishments, lacs of workers will come on road, increasing human misery many fold. In economic terms too, it will shrink purchasing power further, creating a vicious circle of downward economic spiral,'' it added.
The ECLGS which was launched in May 2020 for MSMEs to help them tide over the impact of COVID-19 as part of Atmanirbhar Bharat. The scheme was later extended to 26 more sectors, and healthcare, through ECLGS 2.0. FISME has now called for ECLGS 3.0 with “inbuilt flexibility” to be made available to more firms to deal with the current crisis.
''Fund cash losses incurred by MSME borrowers due to the extraneous circumstances. Give due weightage to the vintage of the firm and treat this period of last three years as an exception, forgiving default,'' the association suggested.
Apart from these, the FISME also suggested some measures such as: Bear the cost of payrolls and/or social security, Suspend SMA norms & the practices of assigning NPAs based on straight jacketed excel sheet based automated systems for Covid period, Double financial powers at all levels and Bank managers encouraged to exercise discretion on a case to case basis, Firms whose CAPEX may have got stuck midway, be sanctioned Term Loan, BLR by external CRAs may be suspended until normalcy returns, ECLGS 3.0 – in build flexibility, make available to more and more firms, NPA, restructuring and enhancement norms may be relaxed on a case to case basis and Period of receivables from government departments/PSUs may not be capped as these are safest assets even if remaining unpaid due to cash crunch with them.