Ease of Doing Business for MSMEs: MSMEs getting it tough to prepare their restructuring proposals on their personal below the restructuring scheme by the Reserve Bank of India (RBI) would now be in a position to prepare and submit it to concerned banks by means of a Do-It-Yourself (DIY) net module. Launched by the MSME-focused Small Industries Development Bank of India (SIDBI), the net portal would enable borrowers to essential in only the most critical information of their previous financials, future projections, and restructuring requirement for the proposal. MSMEs would also be in a position to produce reports for submission to banks. The proposals can be shared with up to 3 banks by means of the portal that has been created in collaboration with the asset reconstruction firm India SME Asset Reconstruction Company.
“MSMEs used to consult some chartered accountants (CA) or budget consultants to structure their proposals so far. They needed some handholding support and had to shell out money to get that done. With this portal, they can do it themselves similar to filing ITR on your own instead of asking a CA to do this for you. It is for the entire MSME sector and not just our customers. This would also bring in transparency in the submission process,” Arup Kumar, General Manager, SIDBI told The Spuzz Online.
The portal has currently been tested by a couple of major banks such as Indian Bank and Punjab National Bank for use by their MSME clients. The two banks would also be accepting the restructuring proposals generated by their MSME clients employing this module. The portal is becoming supplied absolutely free of price. “Banks would get a structured proposal and the time taken to process it in terms of returning the proposal back due to lack of clarity or some wrong information or more information required will be reduced. Otherwise, borrowers submit proposals with their understanding and or through CAs which often are not as per the required guidelines. MSMEs would certainly take benefit of this,” added Kumar.
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The RBI had in August extended the restructuring of MSME debt till March 31, 2021, for accounts classified as normal with the lender as of March 1, 2020. The 1-time restructuring was earlier extended to December 31, 2020, from March 31, 2020, following Finance Minister Nirmala Sitharaman’s announcement in the spending budget that the government had asked the RBI to extend the identical. “More than five lakh MSMEs have benefitted from the restructuring of debt permitted by RBI in the last year,” Sitharaman had stated in her speech.
The documents expected for the proposal might differ as per the internal recommendations of the banks. To comprehensive the restructuring proposal, in addition to economic projections, MSMEs would have to upload soft copies of the signed application type and other documents prescribed by its bank on the portal just before submission. The documents necessary could be restructuring application type or request letter and signed by proprietor, partners, authorised Director, and so forth. Also, final two years balance sheets of the units along with Income Tax/GST returns, and so forth., sales in the course of the existing FY up to the date of submission of application and provisional balance sheet, and extra.