Positive impactEconomy
CEA bats for a review of loan overdue rules for MSMEs
Mint 1 hr ago·9 Oct 2026, 4:55 pm
Chief Economic Adviser V. Anantha Nageswaran has proposed a significant shift in how loan overdue rules are applied to Micro, Small, and Medium Enterprises (MSMEs). The government is being urged to move away from rigid, uniform timelines for classifying loans as non-performing assets (NPAs). Instead, regulations should be tailored to the specific cash-flow cycles of these businesses, which often operate on longer and more variable cycles compared to large corporations.
This move is crucial for the broader market as MSMEs form the backbone of India's economy. By easing strict overdue norms, the government aims to improve credit availability for these businesses, which often struggle to get loans due to rigid banking rules. This could lead to a healthier credit environment and support economic growth in the sector.
Investors should watch for the Finance Ministry's response to this recommendation. If implemented, it could lead to a more supportive regulatory framework for MSMEs, potentially boosting their growth prospects. This policy shift would be a positive signal for the financial sector, as it could reduce the risk of widespread NPAs in this critical segment.
Excerpt from Mint
Chief economic adviser V. Anantha Nageswaran called for tailoring loan overdue regulations to the actual cash-flow cycles of MSMEs rather than relying on rigid, uniform global standards. New Delhi: Chief economic adviser V. Anantha Nageswaran on Friday pitched for a review of loan-overdue regulations for micro, small…Read the original at Mint
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