Mumbai: Reserve Bank On Friday, allaying lenders’ fears about rising crime levels among small business loan borrowers who have been hit hard by the Covid-19 second wave, it said the numbers are not yet alarming.
To support MSMEs during the pandemic through credit measures like Emergency Credit Line Guarantee Scheme (ESLGS) the government and the central bank saw them lending from Rs 6.8 lakh crore in FY15 to Rs 9.5 lakh crore in pandemic-hit FY21 . While the asset quality fell to 12.6 per cent by March 2021, from 12 per cent in December 2020.
Addressing reporters at the customary post-policy presser on Friday, when the central bank left the key policy rate unchanged at 4 per cent, RBI Deputy Governor Mukesh Jain said there is no crisis on this front now, as small businesses There is a tension level among borrowers. There aren’t many, even though slippages and debt restructuring have been on the rise of late.
He said the situation is not too bad as many accounts are going for restructuring under the Covid package version 2 announced in May, which allowed distressed borrowers to opt for a moratorium of up to two years.
Yes, there is a significant increase in slippage in the middle MSME But the amount of slippage has not reached alarming levels, Jain said.
We are constantly monitoring the asset quality of all regulated entities, especially banks and large NBFCs. He said that our stress test also proves that nothing is dangerous right now.
The NPA level among MSME borrowers increased to 12.6 per cent in the March 2021 quarter from 12 per cent in December 2020, while credit to them increased to Rs 9.5 lakh crore, said a SIDBI-CIBIL report dated July 28, 2021. Rs. 6.8 lakh crore in FY21 from FY20.
After the first wave, the RBI had asked all banks and systemically important NBFCs to do stress tests, and their pre-Covid and March 2021 figures show that there has been an all-round improvement on all parameters, be it capital adequacy. Be it the ratio, the NPA/slippery or provision coverage ratio – all have improved and are better than pre-pandemic levels, Jain said, adding that their profitability numbers have also improved.
It may be noted that since the pandemic hit the country in March last year, the government and central banks have been encouraging lenders to give easy loans to small businesses, which number over 6.3 crore, as They are the backbone of the economy. employment and contribution to GDP. But most of the support is in the form of credit, a part of which is guaranteed by the government in case of default.
Last week, Union MSME Minister Narayan Rane had told the Lok Sabha that around 1.09 crore MSME borrowers had been given the promised guarantee support of Rs 1.65 lakh crore under the Emergency Credit Line Guarantee Scheme till July 2, 2022, which was given as part of it. as was declared. The first COVID package in May 2020 to help them meet their operational liabilities and restart businesses.
But, the numbers show that only less than a sixth of the eligible MSME borrowers can avail this facility, as there are over 6.3 crore MSMEs in the country as of May 2021. Several reports state that many of them have closed the shutters due to the pandemic. .
The total limit of ECLGS admissible guarantee was increased from Rs 3 lakh crore to Rs 4.5 lakh crore at the end of June 2021. On its part, the government had cleared dues of Rs 55,863.30 crore to MSMEs between May 2020 and July 2021.
The CIBIL-SIDBI report said credit demand from the MSME segment increased, courtesy interventions such as the Emergency Credit Line Guarantee Scheme, specifying that loans worth Rs 9.5 lakh crore would be extended to MSMEs during the pandemic-hit FY21. 6.8 lakh crores were disbursed against Rs. In FY20. The jump in credit stabilized the overall NPA level as compared to 12.5 per cent in FY15.
The commercial credit exposure stood at Rs 74.36 lakh crore with a growth rate of 0.6 per cent in March 2021, while the credit exposure of the MSME segment increased by 6.6 per cent to Rs 20.21 lakh crore.
Credit disbursements to new-to-bank MSME customers were reduced by 90 per cent in April 2020 as compared to pre-pandemic levels and gradually increased to 5 per cent in March 2021 as compared to pre-pandemic levels.
To support MSMEs during the pandemic through credit measures like Emergency Credit Line Guarantee Scheme (ESLGS) the government and the central bank saw them lending from Rs 6.8 lakh crore in FY15 to Rs 9.5 lakh crore in pandemic-hit FY21 . While the asset quality fell to 12.6 per cent by March 2021, from 12 per cent in December 2020.
Addressing reporters at the customary post-policy presser on Friday, when the central bank left the key policy rate unchanged at 4 per cent, RBI Deputy Governor Mukesh Jain said there is no crisis on this front now, as small businesses There is a tension level among borrowers. There aren’t many, even though slippages and debt restructuring have been on the rise of late.
He said the situation is not too bad as many accounts are going for restructuring under the Covid package version 2 announced in May, which allowed distressed borrowers to opt for a moratorium of up to two years.
Yes, there is a significant increase in slippage in the middle MSME But the amount of slippage has not reached alarming levels, Jain said.
We are constantly monitoring the asset quality of all regulated entities, especially banks and large NBFCs. He said that our stress test also proves that nothing is dangerous right now.
The NPA level among MSME borrowers increased to 12.6 per cent in the March 2021 quarter from 12 per cent in December 2020, while credit to them increased to Rs 9.5 lakh crore, said a SIDBI-CIBIL report dated July 28, 2021. Rs. 6.8 lakh crore in FY21 from FY20.
After the first wave, the RBI had asked all banks and systemically important NBFCs to do stress tests, and their pre-Covid and March 2021 figures show that there has been an all-round improvement on all parameters, be it capital adequacy. Be it the ratio, the NPA/slippery or provision coverage ratio – all have improved and are better than pre-pandemic levels, Jain said, adding that their profitability numbers have also improved.
It may be noted that since the pandemic hit the country in March last year, the government and central banks have been encouraging lenders to give easy loans to small businesses, which number over 6.3 crore, as They are the backbone of the economy. employment and contribution to GDP. But most of the support is in the form of credit, a part of which is guaranteed by the government in case of default.
Last week, Union MSME Minister Narayan Rane had told the Lok Sabha that around 1.09 crore MSME borrowers had been given the promised guarantee support of Rs 1.65 lakh crore under the Emergency Credit Line Guarantee Scheme till July 2, 2022, which was given as part of it. as was declared. The first COVID package in May 2020 to help them meet their operational liabilities and restart businesses.
But, the numbers show that only less than a sixth of the eligible MSME borrowers can avail this facility, as there are over 6.3 crore MSMEs in the country as of May 2021. Several reports state that many of them have closed the shutters due to the pandemic. .
The total limit of ECLGS admissible guarantee was increased from Rs 3 lakh crore to Rs 4.5 lakh crore at the end of June 2021. On its part, the government had cleared dues of Rs 55,863.30 crore to MSMEs between May 2020 and July 2021.
The CIBIL-SIDBI report said credit demand from the MSME segment increased, courtesy interventions such as the Emergency Credit Line Guarantee Scheme, specifying that loans worth Rs 9.5 lakh crore would be extended to MSMEs during the pandemic-hit FY21. 6.8 lakh crores were disbursed against Rs. In FY20. The jump in credit stabilized the overall NPA level as compared to 12.5 per cent in FY15.
The commercial credit exposure stood at Rs 74.36 lakh crore with a growth rate of 0.6 per cent in March 2021, while the credit exposure of the MSME segment increased by 6.6 per cent to Rs 20.21 lakh crore.
Credit disbursements to new-to-bank MSME customers were reduced by 90 per cent in April 2020 as compared to pre-pandemic levels and gradually increased to 5 per cent in March 2021 as compared to pre-pandemic levels.
.