No stressed MSME loan will be declared an NPA till March 31, 2020: Nirmala Sitharaman

The finance minister also said that banks have been asked to follow the circular and not declare any stressed MSME loan as NPA till March 2020 and look at recasting their debt. NEW DELHI: Finance minister Nirmala Sitharaman on Thursday urged banks not to declare any stressed Micro, Small and Medium Enterprises (MSMEs) as a non-performing asset (NPA) till March 31, 2020.

The minister said that banks should make efforts to sit with such MSMEs and work out how best they can come out of the situation even if additional credit is required to be given.

Addressing the media after a meeting with the heads of PSU Banks, Sitharaman said there already exists a circular from the Reserve Bank that provides for stressed loan accounts of MSMEs not being declared non-performing assets (NPAs).

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The finance minister also said that banks have been asked to follow the circular and not declare any stressed MSME loan as NPA till March 2020 and look at recasting their debt.

This would help the MSME sector, she said.

Banks have also identified some NBFCs that they can lend to so that liquidity and credit is made available to those seeking money, she said.