RBI/2012-13/354
RPCD.MSME & NFS. BC. No. 54/06.02.31/ 2012-13
December 31, 2012
The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks
(excluding Regional Rural Banks)
Dear Sir/Madam
In terms of paragraph II (i) of the Priority Sector Circular RPCD.CO.Plan.BC 13/04.09.01/2012-13 dated July 20, 2012, 40 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises having investment in plant and machinery up to Rs.5 lakh and micro (service) enterprises having investment in equipment up to Rs.2 lakh; and 20 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises with investment in plant and machinery above Rs. 5 lakh and up to Rs.25 lakh, and micro (service) enterprises with investment in equipment above Rs.2 lakh and up to Rs.10 lakh.
2. We have been receiving representations from banks that in view of increase in price index and cost inputs, there is a case to revisit the limits within the overall ceiling of Rs.25 lakh for micro enterprises as defined in the MSMED Act. The matter was discussed in the 14th Standing Advisory Committee meeting held on November 21, 2012 wherein it was decided to revise the existing guidelines. Consequently, the existing ceiling of lending to Micro enterprises in the 40:20 proportions has since been revised, as detailed in the Annex, with immediate effect.
3. You are requested to issue suitable instructions to your branches / controlling offices for meticulous compliance.
4. Please acknowledge receipt.
Yours faithfully,
(C.D. Srinivasan)
Chief General Manager
Annex
Sector | Existing sub targets for
lending to MSE sector | Revised sub targets for
lending to MSE sector |
Micro & Small Enterprises (MSE) | (ii) 40 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises having investment in plant and machinery up to Rs.5 lakh and micro (service) enterprises having investment in equipment up to Rs. 2 lakh; (ii) 20 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises with investment in plant and machinery above Rs.5 lakh and up to Rs.25 lakh, and micro (service) enterprises with investment in equipment above Rs.2 lakh and up to Rs.10 lakh | (ii) 40 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises having investment in plant and machinery up to Rs.10 lakh and micro (service) enterprises having investment in equipment up to Rs. 4 lakh; (ii) 20 percent of total advances to micro and small enterprises sector should go to Micro (manufacturing) enterprises with investment in plant and machinery above Rs.10 lakh and up to Rs.25 lakh, and micro (service) enterprises with investment in equipment above Rs.4 lakh and up to Rs.10 lakh |
Priority sector lending sub targets revised: micro enterprise investment bands adjusted and banks must implement new allocation bands immediately. Revision of priority sector sub targets adjusts the 40:20 proportion within MSE lending by reclassifying micro enterprise investment bands: the lower band investment ceilings for micro manufacturing and micro services are raised and the upper band boundaries correspondingly adjusted, while the overall micro enterprise ceiling under the MSMED Act remains unchanged. Banks must implement the revised sub targets immediately and issue instructions to branches for meticulous compliance.
TaxTMI 
AI Drafter ✕
TaxTMI 
