To tide over this situation Reserve Bank of India, Government and other regulatory bodies among others have announced various dedicated schemes, regulatory packages & relief measures for business units affected by COVID-19 pandemic.
"Distressed Asset Fund - Subordinated Debt for Stressed MSMES" is one such scheme to extend support to the promoter(s) of the operational MSMEs which are stressed, viz SMA-2 and NPA accounts as on 30.04.2020 and eligible for restructuring as per RBI guidelines on the books of the Bank. For availing the sub-debt, the unit must be in running condition and operational.
MSME units such as Individuals / Proprietorship, LLP, Partnership, Private Limited Company or registered company are eligible to be covered under the scheme.
As a special dispensation, Reserve Bank of India has permitted to reckon the funds infused by the Promoters in their MSME units through loans availed under this scheme as equity/ quasi equity from the promoters for debt-equity computation.
"Distressed Assets Fund" of Rs. 4000 crore has been created by Government of India for providing guarantee coverage to the loans given / credit extended to the promoters of the eligible MSME units under the scheme.
Financial assistance has to be provided under the scheme by way of sub-debt facility extended by the lending institution to the Promoters of the MSME units upto 15% of promoter's stake or Rs. 75 lakh whichever is lower. Only one personal loan account shall be opened in the name of promoters, subject to maximum quantum of finance of Rs.75.00 Lakh for MSME beneficiary unit.
This personal loan shall not exceed the original debt of the beneficiary. Further, the Equity shall be calculated on the basis of the last available audited balance sheet of a Financial Year. There is moratorium period of 7 years on payment of principal whereas maximum repayment period will be 10 years.
Esta historia es de la edición September 2022 de BANKING FINANCE.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición September 2022 de BANKING FINANCE.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Fraud Risk Management In Banking
Fraud risk management is a fundamental aspect of overall Risk Management within the banking sector. In India, banks adhere strictly to guidelines set forth by the Reserve Bank of India (RBI) to prevent, detect, and promptly report fraudulent activities.
Will Brick-andMortar Banks Get Schooled by FinTech Startups? The Talent War for India's Banking Future
The Indian banking sector is on the cusp of a transformation. FinTech startups are revolutionizing the industry with innovative products, seamless digital experiences, and a culture of agility. But this disruption extends beyond just technology.
Beyond the Rate Hike: Understanding the effects of Monetary Policy Tightening in India
Globally Inflation started rising post April 2021 and went above the target range set by most of the Central Banks. It had remained low and dormant for a substantial duration since the global financial crisis. CPI inflation in developed countries such as US, UK and Euro zone, began to exceed their traditional target of 2% and continue to stay at these elevated levels till recent time.
MSMEs - The Unsung Heroes of India's Economic Journey
Micro, Small, and Medium Enterprises (MSMEs) are the lifeblood of India's economy, contributing significantly to GDP, employment, and exports. Their ability to adapt, innovate, and create opportunities has propelled India towards becoming a global economic powerhouse.
The Role of Sustainable Marketing in Modern Business Practices
The landscape of business is evolving with a growing emphasis on sustainability. Sustainable marketing, which integrates environmental and social responsibility into business practices, is gaining traction as a critical approach for companies aiming to align with the values of modern consumers.
Transforming Indian Banks: How Generative AI is Redefining Marketing
In the fast-paced world of finance, marketing strategies have evolved greatly, using the latest technologies to effectively reach and engage customers. Among these technologies, Generative Artificial Intelligence (AI) stands out as a game-changer.
Legal News
No GST on Fines and Penalties Collected by RBI, Rules Maharashtra AAR
Frauds in Banking Sector and Role of AI in Fraud Management
The banking sector, a cornerstone of the Indian economy, plays a critical role in driving financial inclusion and stability. However, it has not been immune to fraudulent practices, which jeopardize not only the financial institutions but also the trust of the populace.
RBI CIRCULAR
Interest Equalization Scheme (IES) on Pre and Post Shipment Rupee Export Credit
Banking and Financial Services: Paving the Way for India's Development
The adoption of digital payments through platforms like the Unified Payments Interface (UPI) has made cashless transactions a norm. The rapid growth of fintech has democratized access to financial products, making it easier than ever for people across the country to manage their finances.
