Now MSMEs can prepare, submit restructuring proposals to banks on their own with SIDBI’s new DIY portal

Ease of Doing Business for MSMEs: MSMEs finding it difficult to prepare their restructuring proposals on their own under the restructuring scheme by the Reserve Bank of India (RBI) would now be able to prepare and submit it to concerned banks through a Do-It-Yourself (DIY) web module. Launched by the MSME-focused Small Industries Development Bank of India (SIDBI), the web portal would allow borrowers to key in only the most essential data of their past financials, future projections, and restructuring requirement for the proposal. MSMEs would also be able to generate reports for submission to banks. The proposals can be shared with up to three banks through the portal that has been developed in collaboration with the asset reconstruction firm India SME Asset Reconstruction Company.

“MSMEs used to consult some chartered accountants (CA) or budget consultants to structure their proposals so far. They needed some handholding support and had to shell out money to get that done. With this portal, they can do it themselves similar to filing ITR on your own instead of asking a CA to do this for you. It is for the entire MSME sector and not just our customers. This would also bring in transparency in the submission process,” Arup Kumar, General Manager, SIDBI told Financial Express Online.

The portal has already been tested by a few leading banks such as Indian Bank and Punjab National Bank for use by their MSME customers. The two banks would also be accepting the restructuring proposals generated by their MSME customers using this module. The portal is being offered free of cost. “Banks would get a structured proposal and the time taken to process it in terms of returning the proposal back due to lack of clarity or some wrong information or more information required will be reduced. Otherwise, borrowers submit proposals with their understanding and or through CAs which often are not as per the required guidelines. MSMEs would certainly take benefit of this,” added Kumar.

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The RBI had in August extended the restructuring of MSME debt until March 31, 2021, for accounts classified as standard with the lender as of March 1, 2020. The one-time restructuring was earlier extended to December 31, 2020, from March 31, 2020, following Finance Minister Nirmala Sitharaman’s announcement in the budget that the government had asked the RBI to extend the same. “More than five lakh MSMEs have benefitted from the restructuring of debt permitted by RBI in the last year,” Sitharaman had said in her speech.

The documents required for the proposal may vary as per the internal guidelines of the banks. To complete the restructuring proposal, in addition to financial projections, MSMEs would have to upload soft copies of the signed application form and other documents prescribed by its bank on the portal before submission. The documents needed could be restructuring application form or request letter and signed by proprietor, partners, authorised Director, etc. Also, last two years balance sheets of the units along with Income Tax/GST returns, etc., sales during the current FY up to the date of submission of application and provisional balance sheet, and more.