New Delhi: The loan moratorium is over as per the extended limit by 31st August. The clouds of the financial crisis have started hovering over about 4 crore MSMEs of the country. These MSMEs are associated with trade, hotels, transport and other service sectors.The business of the service sector has been stalled since the lockdown started in March this year. Government announced a loan moratorium which ends today. If MSMEs do not pay their monthly installments or pay interest after the loan moratorium is over, the NPA accounts of banks will also increase, which has already been expressed.
According to the Ministry of MSMEs, there are 6.33 crore MSMEs in the country. Of these, 4.36 crore are associated with MSME trade and other service sectors. According to Mukesh Mohan Gupta, president of the Chamber of Indian Micro, Small and Medium Enterprises, there was no business in any sector except the essential sector or certain sectors of manufacturing. The service sector especially came to a complete standstill.
He further added, ‘the government should extend the period of loan moratorium for MSMEs by at least six months. MSMEs associated with the service sector said that the government itself is accepting that this is a pandemic, an act of God, then why are the banks sending messages to them asking for interest and charging recurring interest.
GDP figures for the first quarter (April-June) of the current financial year 2020-21 on Monday also confirm that trade and other services sector operations are affected adversely. According to GDP data, the gross venue added (GVA) of trade, transport, hotel, communications and other service sectors declined by 47 per cent in the first quarter over the same period last year.
MSMEs were given relief by three months. During this period no NPA will be considered and also there will be no effect on CIBIL score of the bank accounts of MSMEs.
If the installments are not paid, the bank can restructure the loan.