The finance ministry has instructed public sector banks not to increase the equated monthly installments (EMIs) on loans to SMEs, village industries and artisans. The Ministry has opined that large companies can go for corporate debt restructuring if they are not able to make timely repayment of their loans, but small industries and retail borrowers do not have that option. Further it has advised banks to adjust the loan tenure of artisans, village industries and SMEs instead of increasing their monthly EMIs.
Bank credit to micro and small enterprises increased by 11.8 per cent to Rs. 2.3 lakh crore this June, compared to 2 lakh crore in the year-ago period. Credit to medium enterprises increased by 31.7 per cent to Rs. 1.8 lakh crore, whereas advances to large industries were up 22.7 per cent to Rs. 12.4 lakh crore.
