RBI links MSME loans to external benchmarks; Govt offers QCO relief, financial aid

• RBI advised banks to link MSME loans to an external benchmark for improved monetary policy transmission, reducing the reset clause to three months and offering a switchover option for existing borrowers.
• Government implements Quality Control Orders (QCOs) with exemptions and relaxations for MSMEs, including extended timeframes for micro/small enterprises and exemptions for export-oriented products and R&D imports.
• Bureau of Indian Standards (BIS) offers financial incentives to MSMEs, such as concessions on annual minimum marking fees (up to 80% for micro-enterprises) and an additional 10% for North-East or women-run units.
• The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) has been announced to facilitate easier access to loans for essential equipment and machinery.
• Scheduled Commercial Banks are mandated not to accept collateral security for loans up to Rs 10 lakh for micro and small enterprises (MSEs).

Why It Matters: Government initiatives aim to ease financial access and support for MSMEs.