The Micro, Small and Medium Enterprises (MSME) sector that has been hit hard amid the slowdown has asked banks to reschedule loans to the tune of Rs 7,000 crore.
Secretary in the Ministry of Micro, Small and Medium Enterprises (MSME), Mr Dinesh Rai said, "The volume of loans for rescheduling runs to an estimated Rs 7,000 crore."
The Reserve Bank of India (RBI) has asked banks to accept the requests for restructuring of loans given to MSMEs till March 31st. So the loan amount for restructuring is expected to rise till the end of the financial year.
The step has been taken to avoid the loans from falling into the non-performing assets (NPAs) category.
There are around 1.3 crore MSMEs in the industry including the informal sector. These MSMEs together add to around 8-9% of country's gross domestic product (GDP) and account to 45% of the manufacturing sector.
The government has been often receiving complaints from the MSMEs about the banks reluctance to lend them. Therefore during the last month, RBI directed PSU banks to increase the flow of credit to the cash-strapped MSME and also restructure their accounts in a time-bound manner.