All States/UTs have constituted Micro and Small Enterprises Facilitation Councils (MSEFCs) for disposal of delayed payment cases of the micro and small enterprises across the country. The Micro, Small and Medium Enterprises Development (MSMED) Act,2006 provides that MSEFC shall consist of not less than three but not more than five members.

As per provisions of Section 18 of the MSMED Act, 2006, every reference made to MSEFC should be decided within a period of 90 days from the date such a reference is made. Furthermore, follow up is done with the State Governments/UT Administrations for timely disposal of the cases.

In order to provide a simpler and faster mechanism to address the stress in the accounts of MSMEs and to facilitate their development, the Ministry of MSME had notified a ‘Framework for Revival and Rehabilitation of MSMEs’ on 29th May, 2015. Under this framework, any enterprise can seek revival and rehabilitation benefit through a Committee constituted by the banks with representatives of State Governments, experts, regional or zonal head of the bank and the officer in charge of MSMEs credit department of the bank. RBI has issued the revised Framework in consultation with the Ministry of MSME on March 17, 2016 to the banks.

This information was given by the Minister of State, Micro, Small and Medium Enterprises, Shri Giriraj Singh in a written reply to a question in Lok Sabha here today.

Delayed payment adjudication secures expedited remedies for MSMEs and a bank based revival framework supports rehabilitation. Micro and Small Enterprises Facilitation Councils (MSEFCs) must be constituted with three to five members and decide references within ninety days; central follow up with States/UTs supports timely disposal. Separately, the Framework for Revival and Rehabilitation of MSMEs permits enterprises to seek revival via bank constituted Committees including bank representatives, State Government representatives, experts, regional/zonal bank heads and the officer responsible for MSME credit, with the Ministry and RBI issuing and revising the Framework respectively.