18% of Mumbai MSME loans are non-performing assets

18% of Mumbai MSME loans are non-performing assets

Subject: Economy

Context: OutofRs162,874croreloans taken by MSMEs in Mumbai(including suburban region), Rs 22,579 crore involving 46,978 accounts have turned into NPAs, according to data compiled by the State Level Bankers Committee

NPA: A loan becomes NPA when the principal or interest payment remains overdue for 90 days.

Micro enterprise : According to the RBI definition, in a micro enterprise, the investment in plant and machinery or equipment should not exceed Rs one cr and turnover is below Rs5cr

State Level Bankers’ Committee

• It is  set-up as per the Lead Bank Scheme of the Reserve Bank of India, is the highest body of bankers in the state.
• The committee meets once a quarter. In addition to reviewing the activities of the institutional lending, the quarterly meetings discuss various issues concerning the economic development of the state, where banks play a pivotal role.
• The meetings aim at finding solution to the various problems confronting the state. The forum takes the lead in initiating, streamlining and accelerating the process of development in close co-ordination with various government departments, Reserve Bank of India, NABARD and other developmental agencies.
• The quarterly meetings are attended by top-level functionaries of member institutions of SLBC, thereby enabling them for meaningful and purposeful discussions on various matters aimed at solving the various issues.