MoMSME proposes framework for revival of sick units
Updated: Mar 12, 2015 04:45:08pm
New Delhi, Mar 11 (KNN) The Ministry of Micro, Small & Medium Enterprises has proposed a draft framework to address the long standing constraints of the MSMEs i.e. sickness of MSMEs, Non-Performing Assets and exit policy.
The draft which came out early this week is currently open for comments and suggestions from stakeholders before it is issued officially through a notification under the Micro Small & Medium Enterprises Development Act, 2006.
The Order has been titled as 'Udyog Bandhu: A Framework for revival of Micro, Small and Medium Enterprises (MSMEs) Order, 2015' that will help the MSMEs tide over financial difficulties by providing them easier access to finance from financial institutions.
Besides, it seeks to provide an easier and expeditious procedure for the benefit of promoters and guarantors to unlock the potential of asset and job creation.
Subject to any regulations prescribed by the Reserve Bank for this Order, all banks shall constitute one or more committees at such locations as may be considered necessary by the bank to provide reasonable access to all eligible MSMEs which have availed credit facilities from such bank, said the notification.
Such committee may include the regional/zonal head of the bank as the chairman of the committee and representatives from the District Industries Centre and a Chartered Accountant as its members. In case of a disagreement between participating banks, it would be resolved in accordance with regulations prescribed by the RBI” the draft framework mentioned.
And subject to the eligibility criteria and satisfying the grounds referred to in the Framework all MSMEs shall have access to a Committee for Distressed Micro, Small and Medium Enterprises for deciding on a Corrective Action Plan (CAP). If an MSME has availed credit facilities from more than one bank, the application shall be made to the Committee of that bank to which the enterprise owes the maximum amount of debt.
The intention of the committee would not be to encourage a particular resolution option, such as restructuring or recovery, but to arrive at an early and feasible solution to preserve the economic value of the underlying assets as well as the lenders' loans, the Ministry said. (KNN/VV)
The draft which came out early this week is currently open for comments and suggestions from stakeholders before it is issued officially through a notification under the Micro Small & Medium Enterprises Development Act, 2006.
The Order has been titled as 'Udyog Bandhu: A Framework for revival of Micro, Small and Medium Enterprises (MSMEs) Order, 2015' that will help the MSMEs tide over financial difficulties by providing them easier access to finance from financial institutions.
Besides, it seeks to provide an easier and expeditious procedure for the benefit of promoters and guarantors to unlock the potential of asset and job creation.
Subject to any regulations prescribed by the Reserve Bank for this Order, all banks shall constitute one or more committees at such locations as may be considered necessary by the bank to provide reasonable access to all eligible MSMEs which have availed credit facilities from such bank, said the notification.
Such committee may include the regional/zonal head of the bank as the chairman of the committee and representatives from the District Industries Centre and a Chartered Accountant as its members. In case of a disagreement between participating banks, it would be resolved in accordance with regulations prescribed by the RBI” the draft framework mentioned.
And subject to the eligibility criteria and satisfying the grounds referred to in the Framework all MSMEs shall have access to a Committee for Distressed Micro, Small and Medium Enterprises for deciding on a Corrective Action Plan (CAP). If an MSME has availed credit facilities from more than one bank, the application shall be made to the Committee of that bank to which the enterprise owes the maximum amount of debt.
The intention of the committee would not be to encourage a particular resolution option, such as restructuring or recovery, but to arrive at an early and feasible solution to preserve the economic value of the underlying assets as well as the lenders' loans, the Ministry said. (KNN/VV)
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