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Collateral free loan for MSMEs on the anvil: RBI
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Saurabh Gupta | 07 Apr, 2010
The Reserve Bank of India (RBI) may soon increase the limit of collateral free loan for micro, small and medium enterprises (MSMEs) from Rs. 5 Lakh to Rs. 10 Lakh, RBI Executive Director, V. K. Sharma told SME Times on
the sidelines of a meeting of the National Board for MSME in the capital today.
"Recently RBI has appointed a working group to review this credit guarantee scheme for MSME and the group has given us many recommendations. One is to increase the limit of collateral free loan from Rs. 5 Lakh to Rs. 10 Lakh.â
When asked how long it will take, he said, "Very soon we will issue the guidelines to the banks to implement this."
"The group has submitted the report, now we will do the inspection," he added.
Previously on Jan 2009, RBI nagged the Indian banks not to ask for collateral security from MSMEs for new loans up to Rs 5 lakh.
As per RBI guidelines, banks are not supposed to insist on collateral security from SMEs for advances up to Rs 5 lakh but only take into account the viability of their projects while granting new loans.
In 1999 the exemption limit for credit without collateral security or third party guarantee was raised from Rs 25,000 to Rs 1 lakh for the small-scale sector.
The limit was raised to Rs 5 lakh for the sector in 2000 and the benefit was extended to all small-scale units in 2002. Later, in 2007, banks were instructed to extend collateral -free loans up to Rs 5 lakh to all new loans sanctioned to MSMEs as defined under MSMED Act, 2006.
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we need Collateral free small business loan
sunitha | Tue Jul 26 05:13:14 2011
Dear sir/madam
My name is sunitha. we are planning to start our own business with help my husband, but we are not financially sound because we are the middle class family even we don’t have a permanent house,
so is that possible to get any kind of support where we can start our own business and we can make our children future secured and we can put effort only for our own.
We will be waiting for your valuable reply and support
Thanks.
small business loan from Nationalized Banks
Bhairava Dutt Akhauri | Sat Oct 2 16:06:32 2010
Sir,It is painful to say that your recommendation's are just on papers as if a person like me visits the Bank,lot of excuses are made and we are denied for the loan saying that as per the guidelines of the bank loan can be provided only if you have any property to mortgage or if somebody who is a reputed customer of this Bank Branch takes guarantee for you.
I need a small business loan for my already running business since Jan.2009 having account in State Bank of India and I tried to get a loan from there but the result remained same.
I request you to kindly look into the matter more carefully so that businessman's like me are not deprived of there real needs.
Kindly make a reply on My email ID aditya_enterprises2009@rediffmail .com
If you really read comments of the viewers then I shall be waiting for your reply which will help me to contact the Bank for this purpose.
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