RBI opens Rs 5,000 crore refinance facility for MSME

In a bid to ease liquidity to Micro and Small Enterprises (MSME) sector, the RBI has extended a Rs 5,000 crore refinance window for a period of one year for the sector. The refinance will be provided to the Small Industrial Development Bank of India (SIDBI) to channelize it as direct liquidity support to finance receivables, including export receivable, to MSMEs.

Why RBI has taken this liquidity support measure?

The RBI has introduced this liquidity support in view of the slowdown in the economy which has resulted in liquidity tightness in a large number of MSMEs in the manufacturing and services sector, particularly due to delayed settlement of receivables from large corporate, public sector undertakings and government departments.

Month: Current Affairs - November, 2013