To help micro, small and medium enterprises (MSMEs) in dealing with their liquidity problems, Parliament today passed a bill to regulate the factoring business.
The Regulation of Factors (Assignment of Receivables) Bill 2011, earlier been passed by the Lok Sabha, was passed by the Upper House today.
Winding up the discussion on the Bill, Minister of State for Finance Namo Narain Meena said various committees had recommended development of factoring business in the country, especially for the MSMEs.
"This (bill) will help in mitigating the payment problem of the MSME units. Factors will be regulated by the Reserve Bank of India. The bill is applicable to all types of industry whether it is small, medium or big," Meena said.
He also said the government had accepted suggestions of the Standing Committee and then held consultations with the banking sector also in this regard.
Tapan Kumar Sen (CPI-M) asked whether a debt restructuring scheme for the medium and small enterprises was in place under this Bill, to which the minister answered in the affirmative.
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Earlier initiating the discussion on the Bill, Rajiv Pratap Rudy (BJP) said with high rate of interest had hit the micro, small and medium enterprises the most and corruption in the country was affecting them all the more.
He said while government was restructuring loans of Rs 34,000 crore for big corporates, same should be done for MSMEs.
Narendra Kumar Kashyap (BSP) asked the government to clear its stand on the issue of commission agents and sought to include small businessmen and farmers, besides fishermen for their financial restructuring.