TEA requests Finance Minister to allow MSMEs with outstanding credit of more than Rs.25 crores to avail emergency credit line from banks

Tirupur: In a press release issued today Raja. M. Shamugham, President of the Tiruppur Exporters Association said, "as per the Government's decision the Emergency Credit Line is accorded to MSMEs from banks and NBFCs, up to 20% of entire outstanding credit as on February 29, 2020.Borrowers with up to Rs.25 Crore outstanding and Rs.100 Crore turnover are eligible."

Raja. M. Shanmugham pointed out that further to upward revision of MSME definition yesterday (1.6.2020), more number of knitwear garment exporting units in Tirupur will fit into the definition of MSMEs and now the concern is that due to the stipulated condition, some of the MSME units’ whose Credit exposure is more than Rs.25 Crore are deprived of receiving the Emergency Credit Line Fund, as their outstanding exceeds Rs.25 Crore.

He further said in view of this the real intention of the Government to extend support to all MSMEs to bailout from the impact of COVID-19 Pandemic needs to be redressed.

While noting down the severe impact ofCOVID-19 on the MSMEs, irrespective ofindustry coupled with crippled economy, Raja. M. Shanmugham said, "It is increasingly becoming necessary to extend liquidity support to the non included MSMEs also, having credit exposure more than Rs.25 Crore, mainly to bring them back to operationalize their units to the normalcy level, do exports and continue to provide employment."

He said he has requested the Hon’ble Union Minister of Finance, Nirmala Sitharaman, to advise RBI to relax the condition and permit even those MSMEs which have a Credit exposure above Rs.25 Crore also to get 20% of outstanding credit at a maximum limit of Rs.25 Crore.

Raja. M. Shanmugham said a separate representation on the same issue has also been sent to the Hon’ble Prime Minister to advise the needful. The similar representation has also been sent to MSME and Textile Ministers and the respective Secretaries including Finance and Banking Secretaries.