RBI Holds 29th Standing Advisory Committee Meeting to Review Credit Flow to MSMEs

Deputy Governor Swaminathan J. reaffirms RBI’s commitment to strengthening institutional credit and promoting digital solutions for MSMEs.

Key Highlights:

• Event: 29th Meeting of the Standing Advisory Committee (SAC) to review the flow of credit to Micro, Small and Medium Enterprises (MSMEs).
• Date & Venue: March 3, 2025, held in Ahmedabad.
• Chairperson: Shri Swaminathan J., Deputy Governor, Reserve Bank of India.
• Attendees: Senior officials from RBI, Ministry of MSME, Ministry of Finance (DFS), SIDBI, NABARD, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), National Credit Guarantee Trustee Company (NCGTC), Khadi & Village Industries Commission, IBA, Finance Industry Development Council, and various MSME Associations.
• Focus Areas Discussed:
  • Reviewing credit flow and identifying measures to bridge the credit gap in the MSME sector.
  • Encouraging cash flow-based lending and adoption of digital credit solutions.
  • Promoting wider participation in Trade Receivables Discounting System (TReDS) platforms.
  • Enhancing the reach and effectiveness of credit guarantee schemes.
  • Ensuring timely revival and rehabilitation of MSMEs facing financial distress.

Key Messages from Deputy Governor Swaminathan J.:

“The MSME sector is the backbone of India’s economy,” he emphasized, reaffirming RBI’s commitment to strengthening institutional credit through initiatives such as the Unified Lending Interface (ULI), the Account Aggregator framework, and the Regulatory Sandbox.

He highlighted challenges including financial literacy gaps, information asymmetry, and delayed payments, calling for digital innovations, alternative credit assessment models, and empathetic lending practices. The Deputy Governor also urged MSME associations to play a larger role in capacity building and information sharing to improve credit access.

In Essence:
The 29th SAC meeting reinforced the Reserve Bank’s focus on a digitally enabled, inclusive, and transparent MSME credit ecosystem. With collaborative efforts between banks, government agencies, and MSME bodies, RBI aims to bridge the credit gap and ensure sustainable growth for India’s micro, small, and medium enterprises.