Banks can deduct loans to new MSME borrowers from NDTL for CRR purpose: RBI

By: |
February 05, 2021 2:26 PM

The Reserve Bank of India (RBI) on Friday allowed banks to deduct loans disbursed to new micro, small, and medium enterprise (MSME) borrowers from their net demand and time liabilities (NDTL) for calculation of the cash reserve ratio (CRR).

MSMESIDBI saw a 22 per cent jump in net worth to Rs 20,694 crore for the nine-month period of FY21.

The Reserve Bank of India (RBI) on Friday allowed banks to deduct loans disbursed to new micro, small, and medium enterprise (MSME) borrowers from their net demand and time liabilities (NDTL) for calculation of the cash reserve ratio (CRR).

“In order to incentivise new credit flow to 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 the cash reserve ratio (CRR),” RBI said in its ‘Statement on Developmental and Regulatory Policies’, announced earlier in the day.

The central bank said for this exemption, ‘new MSME borrowers’ are defined as those MSME borrowers who have not availed any credit facilities from the banking system as on January 1, 2021.

It said the exemption will be available only for exposures up to Rs 25 lakh per borrower for credit extended up to the fortnight ending October 1, 2021, for a period of one year from the date of origination of the loan or the tenure of the loan, whichever is earlier.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.