Lok Sabha Question No. 34 (UNSTARRED), answered on 2018-02-02
Subject: Credit Facility to Industries
Ministry: FINANCE
Asked by: ASHOK MAHADEORAO NETE

## (a) and (b) :

Government and Reserve Bank of India (RBI) have taken several steps to facilitate easy loans  to  Micro,  Small  and  Medium  Enterprises  (MSMEs).  These  inter-alia  include, advise  to  all  Scheduled  Commercial  Banks  (SCBs)  to  achieve  a  20%  year-on-year growth in credit to Micro and Small Enterprises (MSEs), allocation of 60% of the MSEs advances to the micro enterprise accounts, a 10% annual growth in number of micro enterprise  accounts,  adoption  of  clusters,  operationalising  at  least  one  specialised MSME Branch in every district etc.   In addition, a target of 7.5% of Adjusted Net Bank Credit (ANBC) has been prescribed for Micro Enterprises. SCBs have been mandated not to accept collateral security in the case of loans up to Rs.10 lakh extended to units in  the  MSE sector and computation of working capital requirements of MSE units has been simplified to make it minimum 20% of the projected annual turnover of the unit.

- (c) RBI has mandated banks since April 23, 2015 to provide 7.5% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure, whichever, is higher to  Micro  Enterprises  under  Priority  Sector  Lending  (PSL)  norms.  Details  of  lending  to Priority Sector-Micro Enterprises by banks for last three years is given at Annex. Further,  on  the  basis  of  the  recommendations  of  the  Prime  Minister's  Task  Force  on

Micro, Small and Medium Enterprises (MSME), Banks were advised to :

- i. achieve a 20 per cent Year-on-Year growth in credit to Micro and Small Enterprises (MSEs),
- ii. allocate 60% of the MSE advances to the Micro Enterprises and
- iii. achieve a 10% annual growth in number of Micro Enterprise accounts.

The  performance  of  banks  with  respect  to  the  targets  for  lending  to  MSE  sector  by banks for last three years and upto September 30, 2017 is given at Annex.

- (d) and (e) :

In  order  to  provide  a  simpler  and  faster  mechanism  to  address  the  stress  in  the accounts of MSMEs and to facilitate the promotion and development of MSMEs, RBI

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UN-STARRED QUESTION NO. 34

## TO BE ANSWERED ON 2 ND  FEBRUARY, 2018 / MAGHA 13, 1939 (SAKA)

## 'Credit Facility to Industries'

## 34 : SHRI ASHOK MAHADEORAO NETE :

Will the Minister of FINANCE be pleased to state :

- (a) whether the Government has any plan to augment credit facilities to small and medium industries;
- (b) if so, the details thereof;
- (c) the target fixed for providing loan to small and medium industries during each of the last three years and the current year along with the loan amount disbursed thereof;
- (d) whether  the  public  sector  banks/financial  institutions  provide  loan  to  sick  small industries; and
- (e) if so, the details thereof ?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI SHIV PRATAP SHUKLA)

has,  in  consultation  with  the  Ministry  of  MSME,  Govt.  of  India,  issued  guidelines  on 'Framework for Revival and Rehabilitation of MSMEs' on March 17, 2016. The  Committee(s)  formed  under  the  Framework  may  consider  providing  need  based additional finance to the borrower, if considered necessary, as part of the rectification process. Further,  if  the  Committee  decides  that  the  enterprise  requires  financial  resources  to restructure or revive, it may draw up a plan for provision of such additional finance.

## I. Details of lending to Priority Sector-Micro Enterprises by banks for last 3 years

## (Amount in Rs.crore)

| As on March 31 of the Financial Year   | Public Sector Banks   | Public Sector Banks            | Public Sector Banks   | Private Sector Banks   | Private Sector Banks           | Private Sector Banks   |
|----------------------------------------|-----------------------|--------------------------------|-----------------------|------------------------|--------------------------------|------------------------|
|                                        | ANBC                  | Micro Enterprises- Outstanding | %of ANBC              | ANBC                   | Micro Enterprises- Outstanding | %of ANBC               |
| 1                                      | 2                     | 3                              | 4                     | 5                      | 6                              | 7                      |
| 2015                                   | 4689464.99            | N.A.                           | N.A.                  | 1238489.56             | N.A.                           | N.A.                   |
| 2016                                   | 5056593.76            | 321575.75                      | 6.36                  | 1468980.59             | 116473.45                      | 7.93                   |
| 2017                                   | 5329716.19            | 332369.51                      | 6.24                  | 1809536.23             | 148849.11                      | 8.23                   |
| Upto September 2017                    | 5198232.19            | 309994.05                      | 5.96                  | 1916962.60             | 151307.31                      | 7.89                   |

Source : RBI

N.A. - Not Applicable

## II. Details of targets for lending to MSE sector by banks for last three years and upto September 31, 2017

| Particulars                                            |          |             |                   |                    | Private Sector Banks   | Private Sector Banks   | Private Sector Banks   | Private Sector Banks   | Foreign Banks   | Foreign Banks   | Foreign Banks   | Foreign Banks      | All Scheduled Commercial banks   | All Scheduled Commercial banks   | All Scheduled Commercial banks   | All Scheduled Commercial banks   |
|--------------------------------------------------------|----------|-------------|-------------------|--------------------|------------------------|------------------------|------------------------|------------------------|-----------------|-----------------|-----------------|--------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|
|                                                        | (26)     | Public (27) | Sector Banks (27) | Sector Banks (27)  | (20)                   | (20) (21)              | (20) (21)              | (20) (21)              | (32)            | (41)            | (43)            | (43)               | (78)                             | (88)                             | (91)                             | (91)                             |
|                                                        | Mar 2015 | Mar 2016    | Mar 2017          | Sept. 2017 (Prov.) | Mar 2015               | Mar 2016               | Mar 2017               | Sept. 2017 (Prov.)     | Mar 2015        | Mar 2016        | Mar 2017        | Sept. 2017 (Prov.) | Mar 2015                         | Mar 2016                         | Mar 2017                         | Sept. 2017 (Prov.)               |
| Attaining of target of 60% of MSE to Micro Enterprises | 11       | 8           | 10                | 9                  | 7                      | 6                      | 7                      | 4                      | 3               | 2               | 8               | 8                  | 17                               | 16                               | 25                               | 21                               |
| 10 %y-o-y growth in number of Micro enterprises        | 16       | 22          | 13                | 7                  | 14                     | 11                     | 7                      | 8                      | 5               | 6               | 8               | 7                  | 31                               | 39                               | 30                               | 22                               |
| 20% y-o-y growth in credit to MSE sector               | 21       | 3           | 0                 | 3                  | 9                      | 9                      | 7                      | 6                      | 9               | 7               | 13              | 13                 | 25                               | 19                               | 20                               | 22                               |

Source : RBI

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