In a step aimed at easing the liquidity stress in the micro and small enterprises (MSE) sector, the Reserve Bank of India has decided to provide refinance of Rs 5,000 crore to the Small Industrial Development Bank of India (SIDBI).
"In view of the need to ease the liquidity stress to Micro and Small Enterprises (MSE) sector which is employment intensive and contributes significantly to exports, it has been decided to provide refinance of an amount of Rs 5,000 crore to the Small Industrial Development Bank of India (SIDBI)...," RBI said in a notification.
The refinance will be available for direct liquidity support to finance receivables, including export receivable, to MSEs by SIDBI or for liquidity support to MSEs through selected intermediaries, including banks, it said.
The refinance will be available against receivables, including export receivables, outstanding as on November 14, 2013 onwards, it said.
The liquidity support comes in the wake of slowdown in the economy which has resulted in liquidity tightness in a large number of MSEs in the manufacturing and services sector, particularly due to delayed settlement of receivables from large corporate, public sector undertakings and government departments, it said.
The facility will be available at the prevailing 14-day term repo rate for a period of 90 days, it said, adding, during this 90-day period, the amount can be flexibly drawn and repaid.
The refinance facility will be available for a period of one year up to November 13, 2014.
The utilisation of funds will be governed by the policy approved by the board of SIDBI.
Updated Date: Dec 21, 2014 01:08:37 IST