Banks have been advised by the Reserve Bank of India (RBI) to link loans extended to micro, small and medium enterprises (MSMEs) to an external benchmark in order to strengthen monetary policy transmission, the government informed Parliament on Saturday.In a written reply to the Lok Sabha, Minister of State for MSME Shobha Karandlaje said the reset clause for such loans has been reduced to three months under the external benchmark–linked regime, PTI reported. Banks have also been instructed to offer existing borrowers the option to shift to the external benchmark system on mutually agreed terms.Karandlaje added that the government continues to implement Quality Control Orders (QCOs) in a phased manner through the Bureau of Indian Standards (BIS) with specific exemptions and relaxations for MSMEs to ensure that domestic production is not disrupted. These include additional time for compliance—six months for micro enterprises and three months for small enterprises—as well as exemptions for imports used in export-oriented production and for up to 200 units imported for research and development purposes.QCO relaxations also cover clearance of legacy stock within six months of the effective date. BIS extends financial incentives by offering concessions in minimum marking fees—80 per cent for micro enterprises, 50 per cent for small enterprises and 20 per cent for medium enterprises—with an additional 10 per cent concession for MSMEs in the Northeast or those run by women entrepreneurs. The requirement for in-house laboratories has been made optional for MSME units.The minister further said the government has launched the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) to ease access to loans for acquiring equipment and machinery. Scheduled commercial banks, she noted, have been mandated not to seek collateral security for loans of up to Rs 10 lakh extended to micro and small enterprises.
