Interest Subvention Scheme for MSMEs: Modified operational instructions

Reserve Bank on Wednesday (February 5, 2020) said that the statutory auditor’s certificate in respect of interest subvention claim may be submitted by June 30, 2020, and in the meantime settle claims based on internal/concurrent auditor certificate. As per earlier covenants, the interest subvention would be released only on the basis of claim duly certified by the Statutory Auditors of the eligible institutions.   The central bank also notified that Claims in multiple lots for a given half-year by eligible institutions are now accepted.

As per earlier notification MSMEs meet the following two criteria to be eligible as beneficiaries under the Scheme i.e., they should have (a). Valid Udyog Aadhar Number [UAN] (b).Valid GSTN Number. The modified rule says that the requirement of Udyog Aadhar Number (UAN) may be dispensed with for units eligible for GST. In case of a unit not required to obtain GST, may either submit Income Tax Permanent Account Number (PAN) or its loan account must be categorized as MSME by the concerned bank. Further, the notification clarifies that the trading activities also eligible for interest subvention without Udyog Aadhar Number (UAN)

The Ministry of MSME (MoMSME) has implemented the “Interest Subvention Scheme for Incremental credit to MSMEs” vide circular no. FIDD.CO.MSME.BC.No.14/06.02.031/2018-19 dated February 21, 2019.  According to the above circular, the term loan or working capital extended by Scheduled Commercial Banks to MSMEs are eligible under the scheme. Both manufacturing and service enterprises are eligible for relief at two percentage points per annum (2% p.a.), on outstanding balance from time to time from the date of disbursal / drawal or the date of notification of this scheme, whichever is later, on the incremental or fresh amount of working capital sanctioned or incremental or new term loan disbursed by eligible institutions.  Interest subvention would be made available for maximum financial assistance of ₹100 lakh.