Interest rates charged by banks capped at 9.25% under MSME package

Interest rate ceiling for NBFCs loan at 12%; caps are much lower than the normal interest rates charged by these lenders

Interest rates on collateral-free loans extended by banks and financial institutions have been capped at 9.25 per cent and at 12 per cent for loans extended by non-banking financial companies (NBFCs) to micro, small and medium enterprises (MSMEs) under the recently announced package.  

The package, approved by the Cabinet on Wednesday, carries lower interest rate than normally charged by banks and NBFCs. 

Banks charge 11-13 per cent interest rates and NBFCs charge 16-23 per cent interest rates from MSMes, said Ashok Sehgal, co-chairman CII National MSME Council.

The remianing features of the package were already detailed in the presentation made by the finance