Process of Re-Structuring of Bank Loans (MSME/Mid-Corporate/Corporate Loans)

Abstract

Opportunity-7

Survey Reports have shown that disruptions caused by the Covid-19 Pandemic have impacted MSMEs’ earnings by 20-50%, Micro and Small Enterprises faced the maximum heat, mainly due to liquidity crunch.

Enterprises dealing in essential commodities business were better off in terms of interrupted but predictable cash flows. Some enterprises innovated their ways by shifting the focus from non-essential commodities to essential commodities like production of hand sanitizer and toiletries, PPE kits, reusable masks, etc. and are able to survive in tough times.

MSMEs in remote areas also faced lots of difficulties due to Interrupted supply chain systems and intra State lockdown provisions. Accordingly, the Six-member Monetary Policy Committee (MPC), headed by RBI Governor has decided that stressed MSME borrowers will be made eligible for ‘restructuring their debts’ under the existing framework, provided their accounts with the lenders are classified as standard as on March 1, 2020. This restructuring will have to be implemented by March 31, 2021.

Existing and new MSMEs clients of CMAs require professional/support services like restructuring process of the loans taken from banks/NBFCs’ due to liquidity problem on account Covid-19 Pandemic. If this type of addon Service are provided by CMAs, it would not only broaden the professional services offered by CMAs but also help the MSME sector during the Covid 19 Crisis.