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 convened on October 27, 2025, in Coimbatore, under the chairmanship of Shri Swaminathan J, Deputy Governor, Reserve Bank of India (RBI). The SAC serves as a key platform for dialogue between policymakers, regulators, financial institutions, and industry representatives to enhance credit accessibility and strengthen the financial ecosystem for MSMEs — a cornerstone of India’s growth story.
The meeting witnessed participation from senior officials representing the Ministry of MSME, Department of Financial Services (Ministry of Finance), Small Industries Development Bank of India (SIDBI), NABARD, State Bank of India, Punjab National Bank, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), National Credit Guarantee Trustee Company (NCGTC), Khadi and Village Industries Commission (KVIC), Indian Banks’ Association (IBA), Finance Industry Development Council (FIDC), and various MSME associations.
Keynote Address: RBI’s Continued Support to MSMEs
In his opening remarks, Shri Swaminathan J highlighted the pivotal role played by MSMEs in driving economic growth, employment generation, and industrial diversification across India. He reaffirmed the RBI’s commitment to fostering a resilient and inclusive credit environment for the sector, emphasizing that MSMEs are vital to the country’s economic fabric and must be supported through both policy and technological innovation.
He outlined a series of RBI initiatives aimed at transforming MSME lending — including the Unified Lending Interface (ULI), the Account Aggregator (AA) framework, and the Regulatory Sandbox. These initiatives, he noted, are enabling cash-flow-based and data-driven lending, ensuring faster, more transparent, and risk-calibrated credit flow to small businesses.
Addressing Structural and Operational Challenges
The Deputy Governor also discussed recent regulatory measures introduced to address sector-specific challenges. These include the waiver of prepayment penalties on floating-rate loans for individuals and micro and small enterprises, and simplification of reporting norms under the Export and Import Data Processing and Monitoring Systems (EDPMS/IDPMS) — steps designed to ease the compliance burden on small exporters and importers.
He emphasized the importance of bridging information asymmetry and financial literacy gaps, which often hinder MSMEs from fully utilizing formal credit channels. Encouraging wider adoption of digital platforms like the Trade Receivables Discounting System (TReDS), he highlighted the need for alternative credit assessment models and empathetic lending practices to facilitate the rehabilitation of viable but distressed MSME units.
Deliberations and Way Forward
The SAC reviewed the flow of credit to MSMEs, with detailed discussions on cash-flow-based lending, credit guarantee utilization, digital integration for loan processing, and the revival and restructuring of stressed MSME units. Participants explored ways to accelerate the adoption of TReDS platforms, promote credit guarantee schemes such as those offered by CGTMSE and NCGTC, and enhance overall financial inclusion for micro enterprises.
During the interactive session, MSME industry associations raised concerns about the impact of global geopolitical uncertainties on supply chains, exports, and input costs. They sought continued collaboration among the Government, RBI, and Banks to ensure timely policy support and credit facilitation.
The meeting concluded with an assurance from RBI officials that all feedback and actionable suggestions would be carefully examined by the concerned stakeholders to refine policies and strengthen the MSME credit ecosystem further.
Conclusion
The 30th SAC meeting underscores the Reserve Bank of India’s ongoing commitment to improving MSME financing and promoting inclusive economic growth. By aligning regulatory frameworks with technological innovation and stakeholder collaboration, the RBI continues to empower small businesses — the growth engines of India’s economy.
Through sustained policy support, digital transformation, and institutional coordination, the RBI aims to build a resilient and future-ready MSME sector, ensuring that access to credit becomes not a challenge, but a catalyst for enterprise-led progress.