As per the recent announcement, RBI has exempted banks from keeping cash reserve ratio (CRR) requirement against loans disbursed to the new borrowers.
The announcement comes at a time when the Budget failed to extend the Rs 3 lakh crore emergency credit line guarantee scheme for stressed MSME borrowers. The scheme is set to expire in March 2021. Under the scheme banks and non-banks have sanctioned 76.6% of the funds allocated under the scheme.
In its statement on development and regulatory policies, RBI said micro, small and medium enterprises (MSMEs) who have not availed of any credit facility as on 1st January can be considered for this exemption. This includes all exposures up to Rs 25 lakh per borrower for credit extended up to the fortnight ending 1st October, 2021.
“In order to incentivise new credit flow to the MSME borrowers, Scheduled Commercial Banks will be allowed to deduct credit disbursed to ‘New MSME borrowers’ from their net demand and time liabilities (NDTL) for calculation of CRR,” it said.