The Consortium of Indian Associations (CIA), a group of more than 30 trade bodies and regional associations of small and medium-sized enterprises, has expressed disappointment at the relief measures announced today by the Reserve Bank of India (RBI) for companies affected by Covid.
“The Benefits of the Announcements – Resolution Framework 2.0 for COVID-related Stressed Assets of Individuals, Small Businesses and MSMEs, Small Financial Bank (SFB) Loans to MFIs for On-Lending to be Classified as Priority Sector Loans, Credit to MSME entrepreneurs, Special Long-Term Repo Operations (SLTROs) for Small Financial Banks (SFBs) will not benefit MSMEs and self-employed workers who are severely affected by COVID 1 and COVID 2 and have cash flow issues and a dark and unpredictable future, “KERaghunathan, organizer, told the CIA.
“The alternative to the moratorium by restructuring loans for accounts that are ‘standard’ as of March 31, 2021, will deprive many self-employed workers and micro / small businesses from taking advantage of this advantage. Many companies engage in tourism, hospitality, gyms, trade shows SPAs, transport, tour operators, automotive, service industry, restaurants, hotels and many more have all been left behind aside, â€he said, adding that their activities had been touched“ beyond imagination â€.
According to Raghunathan, what is needed is emergency relief, not restructuring announcements that take time and will lead to chaotic implementation. In addition, the relief will be offered at the discretion of the banks.
The organization expressed disappointment with RBI’s decision not to waive or reduce the “interest†component of the loans. He described as disappointing the lack of support for exporters who grant more credits or for startups who do not have existing loans. “The priority sector category and the higher allocation of additional loans alone cannot be a solution at this time. What is needed is a reduction in the cost of financing, ways to increase profits. and demand, relief from EMI payments to save funds for emergency needs to fight Covid, â€said Raghunathan.
In a special announcement, RBI Governor Shaktikanta Das set out a series of measures as a comprehensive and targeted policy response to the economic disruption caused by the second wave of Covid-19.
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