The Reserve Bank of India (RBI) has updated the Master Direction on Lending to Micro, Small & Medium Enterprises (MSME) Sector as on April 25, 2018. Vide this update-
· All bank loans to MSMEs, engaged in providing or rendering of services as defined in terms of investment in equipment under MSMED Act, 2006, shall qualify under priority sector without any credit cap.
· Domestic Commercial Banks and foreign banks with 20 branches and above are required to achieve a sub-target of 7.5% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, for lending to Micro Enterprises. However, this sub-target for lending to Micro Enterprises is not applicable to foreign banks with less than 20 branches operating in India
[RBI/FIDD/2017-2018/56 Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18]