The Reserve Bank of India vide its notification dated 5th May 2021 has extended the incentivise credit flow to the micro, small, and medium enterprise till 31st December 2021.
As per the earlier notification dated 5th February 2021, Scheduled Commercial Banks were allowed to deduct the amount equivalent to credit disbursed to ‘New MSME borrowers’ from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR) and this exemption shall be available only up to ₹25 lakh per borrower disbursed up to the fortnight ending October 1, 2021, for a period of one year, however it has now been extended till 31st December 2021.
For the purpose of this exemption, ‘New MSME borrowers’ shall be defined as those MSME borrowers who have not availed any credit facilities from the banking system as on January 1, 2021.
