RBI's panel on MSMEs bats for Rs 5,000-crore stressed asset fund

Committee also suggests doubling collateral-free loans to Rs 20 lakh

A Reserve Bank of India (RBI) committee has recommended doubling collateral-free loans for micro, small and medium enterprises (MSMEs), self-help groups, and borrowers falling under the Pradhan Mantri Mudra Yojana to Rs 20 lakh. The eight-member expert panel, headed by former Securities and Exchange Board of India chairman U K Sinha, has also suggested creating a stressed asset fund of Rs 5,000 crore to protect the sector from distress caused by external circumstances.
 
The RBI had constituted the committee in January to review the current framework for MSMEs and suggest long-term solutions for their economic and financial sustainability.