RBI decided to permit banks to reckon the funds infused by the promoters in their MSME units through loans availed under the captioned CGTMSE scheme as equity/quasi equity from the promoters for debt-equity computation.

Reserve Bank of India

RBI/2020-21/09
DoR.BP.BC.No.01/21.04.048/2020-21

Dated: July 1, 2020

All Scheduled Commercial Banks (including Scheduled RRBs)

Dear Sir/Madam,

Distressed Assets Fund – Subordinate Debt for Stressed MSMEs

Please refer to the circular No.170/2020-21 dated June 24, 2020 issued by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) regarding the captioned scheme. As the credit facilities extended under the above scheme are backed by a guarantee from CGTMSE, as a special dispensation, it has been decided to permit the banks to reckon the funds infused by the promoters in their MSME units through loans availed under the captioned scheme as equity/quasi equity from the promoters for debt-equity computation.

Yours faithfully,

(Saurav Sinha)
Chief General Manager-in-Charge

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