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Refinance Scheme for MSE to Liquidity Support

Special Refinance Scheme – 2021 (SLS II-SRS-2021)

  • To provide refinance assistance to eligible PLIs to support liquidity needs of their Micro and Small Enterprises (MSEs) end-borrowers.
Scheduled Banks (Public, Private, Foreign and Small Finance Banks).
FOR BANKS (other than SFBs):
  • In operation for a period of 3 years.
  • Earned profit during the last 2 years.
  • Have sizable outstanding portfolio / financial assistance to MSEs.
  • Net-worth of not less than `50 crore.
  • Capital to risk weighted assets (CRAR) of not less than 9%;
  • Net NPAs not exceeding 10%.


FOR SFBs:
  • Should have been granted final license by Reserve Bank of India (RBI) for carrying on Small Finance Bank business and have commenced operations of the Small Finance Bank.
  • The SFB / previous entity prior to conversion into SFB (taken together) should have earned profits during at least 2 years out of the last 3 years.
  • Should have sizeable outstanding portfolio comprising advances to micro credit and / or MSEs; and
  • Should comply with the applicable Benchmarks norms for Sanction as under:
Sl. No. Parameter BfS Norms
1 Networth > or = `100 crore
2 CRAR > or = 15%
3 Gross NPA < or = 7%
  • End-borrowers - MSEs as per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 / As per definition contained in GoI Gazette Notification S.O.2119(E) dated June 26, 2020
  • MSE end-borrower account up to SMA -1 category eligible to be covered under refinance as applicable under the scope of ECLGS 2.0 in the healthcare and 26 other high stress sectors (as identified by the Kamath Committee)
  • Activities - As defined in section 2(h) of SIDBI Act, 1989.
  • Up to 12 months or June 10, 2022, whichever is earlier.
  • Up to 36 months (which will be provided by augmenting with own funds from SIDBI).
  • The Bank shall hold in trust for SIDBI, all the securities including movable and immovable assets, book debts, receivables, actionable claims, guarantees, assignments, bills of exchange and proceed thereof as also other securities as may be directly or indirectly obtained or to be obtained by the bank from its borrowers to secure the financial assistance made available to the borrowers for which the loan has been sanctioned by SIDBI to the Bank.