MUMBAI: MSMEs received a fresh boost in terms of credit support from the Reserve Bank of India. While SIDBI's credit facility was rolled over, Exim Bank received a fresh line of credit line. In additions exporters and importers too got some added sops The RBI had in its March statement announced a special refinance facility of Rs 15,000 crore to SIDBI at RBI’s policy repo rate for a period of 90 days for on-lending and refinancing which has been rolled over by another 90 days. "In order to provide greater flexibility to SIDBI, it has been decided to roll over the facility at the end of the 90th day for another period of 90 days" Governor Shaktikanta Das said in his statement to the media on Friday.
MSMEs contribute to around 40 per cent of country's GDP. Besides, to enable EXIM bank to meet its foreign currency resource requirements, the Reserve Bank is planning to extend a line of credit of Rs 15,000 crore to Exim Bank for a period of 90 days (with rollover up to one year) so as to enable it to avail a US dollar swap facility. "These measures alongside earlier announcements by the RBI as well as the Finance Minister have been undertaken to address the stress due to cash flow disruptions caused by Covid-19 and improve availability of liquidity" said Care Ratings in a report. In addition, the Reserve Bank has announced measures to address exporters' difficulties in their production and realisation cycles.
The maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks is increased from the existing one year to 15 months, for disbursements made up to July 31, 2020. The RBI has decided to extend the time period for completion of outward remittances against normal imports (i.e. excluding import of gold/diamonds and precious stones/jewellery) into India from six months to twelve months from the date of shipment for such imports made on or before July 31, 2020.
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