**Executive Summary**
The 30th Meeting of the Standing Advisory Committee (SAC) was held on October 27, 2025, in Coimbatore, under the chairmanship of the Deputy Governor, Reserve Bank of India (RBI). The meeting reviewed the flow of credit to the Micro, Small, and Medium Enterprises (MSME) sector. Discussions focused on addressing credit gaps, promoting digital solutions, and enhancing credit guarantee schemes to support MSMEs.
**Key Points / Main Content**
* **Opening Remarks:**
* The Deputy Governor acknowledged the MSME sector's critical role in India's economic growth.
* RBI reaffirmed its commitment to strengthening the MSME credit ecosystem.
* **Regulatory Measures & Initiatives:**
* Recent measures to ease difficulties faced by MSMEs were highlighted, including the waiver of prepayment charges on floating-rate loans and relaxation in reporting under EDPMS/IDPMS.
* Initiatives like the Unified Lending Interface (ULI), Account Aggregator framework, and the Regulatory Sandbox facilitate data-driven lending.
* **Addressing Challenges:**
* Emphasis was placed on promoting digital solutions like TReDS, alternative credit assessment models, and empathetic lending practices.
* MSME associations were urged to enhance capacity building and bridge information gaps for enterprises.
* **SAC Review & Deliberations:**
* The SAC reviewed the flow of credit to MSMEs.
* Discussions covered addressing credit gaps, promoting cash-flow based lending, accelerating TReDS adoption, enhancing credit guarantee schemes, and reviving MSME units.
* **Industry Concerns:**
* Industry associations highlighted challenges due to geopolitical uncertainty and sought intervention from Government, Regulators, and Banks.
**Impact Analysis**
**Stakeholder: MSMEs**
* **Impact:** The discussions and measures directly affect access to credit, financial literacy, and the ease of doing business for MSMEs.
* **Action Required:** MSMEs should leverage digital solutions and credit guarantee schemes, participate in capacity-building programs, and engage with MSME associations.
**Stakeholder: Banks and Financial Institutions**
* **Impact:** Banks and financial institutions, including SBI, Punjab National Bank, SIDBI, and NABARD, are expected to implement the discussed initiatives and lending practices.
* **Action Required:** Promote TReDS, adopt alternative credit assessment models, ensure transparent lending practices, and actively rehabilitate distressed MSME units.
**Stakeholder: Government and Regulators**
* **Impact:** Government and Regulators are responsible for addressing policy challenges and creating a conducive environment for MSME growth.
* **Action Required:** The Government, Regulators and Banks will need to consider feedback and suggestions from stakeholders to address the challenges and support the MSME sector.
Key Entities Referenced
Standing Advisory Committee (SAC): Committee to review the flow of credit to the Micro, Small and Medium Enterprises (MSME) sector.
MSME Sector: Micro, Small and Medium Enterprises sector in India, a key focus for economic growth.
Reserve Bank of India (RBI): India's central bank, involved in initiatives to strengthen the credit ecosystem for MSMEs.
Trade Receivables Discounting System (TReDS): A digital solution promoted for wider adoption to address information asymmetry and delayed payments in the MSME sector.
Unified Lending Interface (ULI): An initiative referred to for strengthening the credit ecosystem for MSMEs.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
October 27, 2025
30th Meeting of the Standing Advisory Committee (SAC) to Review the Flow of
Credit to the MSME Sector
The 30th Meeting of the Standing Advisory Committee (SAC) to review the flow of
credit to the Micro, Small and Medium Enterprises (MSME) sector was held in
Coimbatore on October 27, 2025, under the chairmanship of Shri Swaminathan J,
Deputy Governor, Reserve Bank of India. The meeting was attended by the
Executive Directors from RBI, Additional Secretary from the Ministry of MSME and
Joint Secretary from the Department of Financial Services, Ministry of Finance,
Government of India; Chairman, SIDBI; Managing Directors of SBI and Punjab
National Bank, senior management of major banks and NABARD; senior executives
of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE),
National Credit Guarantee Trustee Company Limited (NCGTC), Khadi & Village
Industries Commission (KVIC), Indian Banks’ Association (IBA), Finance Industry
Development Council (FIDC), and representatives from MSME associations. The last
two meetings of SAC were held in Lucknow and Ahmedabad.
In his keynote address, the Deputy Governor acknowledged the critical role of the
MSME sector as the key driver of India’s economic growth, employment, and
industrial and regional diversification. Reaffirming the Reserve Bank’s commitment to
further strengthen the credit ecosystem for MSMEs, he referred to initiatives such as
the Unified Lending Interface (ULI), Account Aggregator framework, and the
Regulatory Sandbox, which are facilitating data-driven and cash-flow based lending.2
He touched upon the recent regulatory measures to ease the difficulties faced by
the sector, including the waiver of prepayment charges on floating-rate loans
extended to individuals and micro and small enterprises, and the relaxation in
reporting under the Export and Import Data Processing and Monitoring Systems
(EDPMS/IDPMS) to ease compliance burden for small exporters and importers.
Addressing the challenges of information asymmetry, financial literacy gaps, and
delayed payments, the Deputy Governor emphasized the need to promote wider
adoption of digital solutions like the Trade Receivables Discounting System (TReDS),
encourage alternative credit assessment models, and ensure fair, transparent, and
empathetic lending practices for promotion of rehabilitation of distressed but viable
units. He also urged MSME associations to play a greater role in capacity building
and in bridging information gaps to help enterprises better leverage formal financial
channels.
During the meeting, the SAC reviewed the flow of credit to MSMEs and
deliberated on ways to address the issues related to the credit gap in the sector,
cash-flow based lending and digital solutions for improved credit linkage, accelerating
adoption of TReDS, enhancing the usage of credit guarantee schemes, and revival
and rehabilitation of MSME units, among others.
During the interactive session, the industry associations highlighted the challenges
being posed by the uncertainty arising from geopolitical situations and sought the
intervention of Government, Regulators and Banks. The meeting concluded with
responses from the officials and an assurance that the feedback and suggestions will
be duly examined by the concerned stakeholders.
(Brij Raj)
Press Release: 2025-2026/1388 Chief General Manager