Ease of Doing Business for MSMEs: Small Industries Development Bank of India (SIDBI) — the principal financial institution focusing on micro, small, and medium enterprises (MSMEs) in the country on Tuesday announced signing a memorandum of understanding (MoU) with the Central Bank of India to facilitate latter’s MSME customers to use web-based asset restructuring module. The module, which was launched recently, is a Do-It-Yourself (DIY) web portal to help MSMEs prepare their restructuring proposals on their own under the restructuring scheme by the Reserve Bank of India (RBI). Developed in collaboration with the asset reconstruction firm India SME Asset Reconstruction Company, the portal lets MSMEs key in only the most essential data of their past financials, future projections, and restructuring requirement for the proposal.
MSMEs would also be able to generate reports for submission to banks. As of now, MSMEs can share their proposals with up to three banks through the portal. “It will help MSME customers to submit a restructuring plan for their units online to Central Bank of India in a simple and easy manner. SIDBI in partnership with local MSME associations have placed credit counselors at different locations to provide hand-holding support to MSME units seeking restructuring. All these services are available free of cost,” SIDBI said in a statement. The bank had last month entered into a similar pact with the Indian Bank to help the latter’s MSME customers.
“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,” Arup Kumar, General Manager, SIDBI had told Financial Express Online.
While the documents required for the proposal may vary as per the internal guidelines of the banks, MSMEs would have to upload soft copies of the signed application form and other documents prescribed by its bank on the portal before submission to complete the restructuring proposal in addition to financial projections. Among the documents mandated included restructuring application form or request letter and signed by proprietor, partners, authorised director, etc. Moreover, the last two-year balance sheets of the units along with Income Tax/GST returns, etc., sales during the current FY up to the date of submission of application and provisional balance sheet, and more would also be required. The RBI had extended debt restructuring for MSMEs in August until March 31, 2021, for accounts classified as standard with the lender as of March 1, 2020.
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