MSMEs welcome waiver of pre-closure charges

The Micro, Small and Medium-scale Enterprises (MSMEs) have welcomed the Reserve Bank of India circular waiving pre-closure charges for micro and small enterprises.

The Southern India Engineering Manufacturers Association (SIEMA) president Mithun Ramdas said the Association had sought a waiver of the pre-closure charges for all MSMEs. Since the government had permitted the opening of new non-banking financial institutions (NBFCs), several MSMEs that were under financial stress wanted to move the accounts to the NBFCs or banks that offered loans at lower interest rates. However, the pre-closure charges collected from these units were high.

In a recent circular, the RBI said the charges were waived for micro and small-scale units. This would benefit a large number of units, he said.