RBI monetary policy: New norms on NPA little help for small units

The RBI said on Wednesday it would allow all MSMEs to pay their dues to banks and NBFCs up to 180 days after the due date without these being classified as bad loans

The micro, small and medium enterprises (MSME) sector is unsure if the new norms for their segment on stressed bank loans will help to what extent.

The Reserve Bank (RBI) said on Wednesday it would allow all MSMEs to pay their dues to banks and non-banking financial companies (NBFCs) up to 180 days after the due date without these being classified as bad loans.

Apart from providing banks some more room to reduce their official exposure to the burgeoning of non-performing assets (NPAs), this is expected to help more small businesses escape being classified as defaulters.

“Current banking norms categorise