MSME rehabilitation
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Small and Medium Enterprises in India — Certificate Course on MSME.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary objective of MSME rehabilitation as defined by RBI guidelines?
The primary objective is to revive potentially viable sick MSMEs through timely financial and managerial support, enabling them to restore normal operations and repay debts.
What is the minimum period of continuous default required for an MSME to be classified as 'sick' under RBI guidelines?
Three months of continuous default in debt servicing.
How is an MSME unit classified as 'sick' under RBI norms?
An MSME unit is classified as sick if its borrowal account remains NPA for three months or more, or if there is erosion of net worth due to accumulated losses to the extent of 50% or more of its peak net worth during the preceding two accounting years.
What is the purpose of the 'relief and concessions' package offered to sick MSMEs during rehabilitation?
To restore viability by reducing financial burden on the unit.
What is the time limit prescribed for banks to identify incipient sickness in MSME units?
Banks are expected to identify incipient sickness at an early stage, ideally within two years of commencement of commercial production, by monitoring early warning signals such as declining sales, mounting losses, and irregularity in accounts.
Which committee at the district level coordinates rehabilitation efforts for sick micro and small enterprises?
District Level Review Committee (DLRC) coordinates rehabilitation efforts.
What are the three broad categories used to classify sick MSMEs for rehabilitation purposes?
Sick MSMEs are classified as potentially viable (capable of revival with support), viable (can become viable with restructuring), and non-viable (beyond rehabilitation), determining the course of remedial action.
What is 'additional working capital' in an MSME rehabilitation package?
Fresh working capital infusion to revive operations of the sick unit.
Video classes for this chapter
Master the full MSME syllabus
Every chapter of Small and Medium Enterprises in India — videos, tests, notes and one-liner decks in one place.