Former Sebi chief UK Sinha to head RBI panel on MSMEs

MUMBAI: The RBI on Wednesday set up an expert committee under former Sebi chairman U K Sinha to suggest long-term solutions for the economic and financial sustainability of the micro, small and medium enterprises (MSME) sector.

The RBI announced the panel a day after it allowed a one-time restructuring of existing debt up to Rs 25 crore for MSMEs, which have defaulted on payments but the loans given to them have continued to be classified as standard assets.

The eight-member committee will also examine factors affecting the timely and adequate availability of finance to the sector, the RBI said in a statement. “The expert committee will submit its report by the end of June 2019,” it said.

Studying global best practices with respect to MSMEs and recommending its adoption in the country, along with reviewing existing MSME-focused policies and its impact on the sector are among the issues which the panel will look into.

While constituting the panel, the RBI said that considering the importance of the MSMEs in the Indian economy, it is essential to understand the structural bottlenecks and factors affecting the performance of the MSMEs. Such enterprises contribute about 40% to the country’s export and 45% in the manufacturing sector.