Press Information Bureau

Government of India

Ministry of Micro,Small & Medium Enterprises

10-December, 2012 16:14 IST

As per the data furnished by the Reserve Bank of India (RBI), there were 100.08 lakh accounts of Micro, Small and Medium Enterprises (MSMEs) who availed loans from Scheduled Commercial Banks at the end of March, 2012. The data on sick MSMEs in respect of these banks, indicate that there were 89,642 sick enterprises at the end of March, 2012.

The factors responsible for unsuccessful entrepreneurs include “Marketing Problem”, “Finance Problem”, “Could not survive competition” etc. The potentially viable sick units are encouraged to revive their activities by way of providing rehabilitation package as announced by RBI. Financial assistance, by way of debt restructuring, including fresh loans for rehabilitation of MSEs is provided by primary lending institutions, including commercial banks, which provide credit to the MSEs. RBI has issued following guidelines / instructions to banks in this respect.

(i) Rehabilitation of sick MSEs (January 2002)

(ii) Debt restructuring mechanism relating to viability criteria, prudential norms for restructured accounts, provision of additional finance and time frame for restructuring package (September 2005); and

(iii) Restructuring / rehabilitation policy with non-discretionary one-time settlement scheme for MSE sector (May 2009).

As per RBI data, out of 89,642 sick enterprises at the end of March, 2012, 6751 were put under nursing for rehabilitation.

This information was given by the Minister of State (Independent Charge) for Micro, Small and Medium Enterprises, Shri K. H. Muniyappa in a written reply to a question in the Rajya Sabha today.

 

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RTS/HSN

 

Debt restructuring and rehabilitation measures for MSMEs permit banks to apply viability-based restructuring and fresh finance to revive sick units. RBI-prescribed rehabilitation and debt restructuring frameworks require banks and primary lending institutions to apply viability criteria, prudential norms, and time-limited restructuring packages, including one-time settlement schemes and provision of additional finance and fresh loans to revive potentially viable sick MSMEs.