: Some MSMEs may need ‘deep restructuring’: Union Bank #FinanceIndia #StockMarketNEWS Some MSMEs may need ‘deep restructuring’: Union Bank Kolkata, May 12 (KNN) Liquidity support might not be

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Some MSMEs may need ‘deep restructuring’: Union Bank #FinanceIndia #StockMarketNEWS
Some MSMEs may need ‘deep restructuring’: Union Bank Kolkata, May 12 (KNN) Liquidity support might not be the only solution to the problems faced by the Micro, Small and Medium Enterprises (MSME) sector, as many firms might need ‘deep restructuring’, said Rajkiran Rai, Managing Director and Chief Executive Officer of Union Bank of India.

Speaking at an e-session organised by the Bharat Chamber of Commerce on Monday, Rai said, ‘‘Quickest response in this crisis is temporary liquidity support to MSMEs. As we go forward, lot of policy interventions will be needed……. we need to see what kind of cash flow is available with the MSMEs.

Based on that, some kind of deep restructuring needs to be done, but this has to come from the regulator. Viability of units will depend upon much bigger issues than just credit alone,” Rai added.

Rai said that interest subvention schemes can help in bringing interest rates down.

“Our hands are tied with regard to reducing interest rates. Our source of funds is deposits and as long as that remains high, lending rates will continue to be high. Moreover, the credit cost in lending to MSMEs is higher due to the high NPAs so it is difficult to bring down interest rates. One way of bringing it down could be interest subvention but banks cannot do this alone, they need support from government and regulator,” he added.

While speaking on the moratorium, Rai said 50 per cent of MSME customers of Union Bank of India have opted for moratorium.

According to Rai there has not been much progress for an alternative rating mechanism for MSMEs.

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