Interest Subvention Scheme for MSMEs
March 1, 2019
Members of the Council,
Sub : Interest Subvention Scheme for MSMEs
Further to the outreach support measures announced by the Hon’ble Prime Minister for Micro Small and Medium Enterprises on November 2, 2018, the Reserve Bank of India has issued two circulars (No. 125 dated Feb. 21, 2019 – applicable for banks and No . 129 dated Feb. 22, 2019 – applicable for non-banking financial corporations) regarding interest subvention scheme for MSMEs. The highlights of this scheme is as follows.
a) This scheme will be operation for two years during Financial Years 2019 and 2020.
b) All MSMEs having valid Udyog Aadhar Number and GSTN number are eligible.
c) Incremental term loan or fresh term loan or incremental or fresh working capital extended (for coverage to the extent of Rs.100 lakh) during current financial year i.e. from Nov. 2, 2018 and next financial year would be eligible for coverage.
d) MSME exporters availing interest subvention for pre-shipment or post-shipment credit under Department of Commerce will not be eligible for assistance under this Interest subvention scheme
e) The interest relief will be calculated at two percentage points per annum on outstanding balance from time to time from the date of disbursal/drawal or the date of notification of this scheme, whichever is later, on the incremental or fresh amount of working capital sanctioned or incremental or new term loan disbursed by eligible institutions.
The aforesaid RBI circulars are enclosed herewith for reference of members.
With kind regards