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CS Executive · Setting Up of Business, Industrial and Labour Laws · Micro, Small and Medium Enterprises

Kaveri Foods, a small enterprise in Madurai, is facing delays in bank credit. Under the MSMED Act, 2006, the policies and practices on credit to MSMEs are to be progressive and as specified in guidelines or instructions issued by which body?

The Reserve Bank issues them. Section 10 of the MSMED Act, 2006 provides that credit policies and practices for MSMEs must be progressive and as specified in RBI guidelines or instructions, to ensure timely and smooth credit flow.

  1. AThe Reserve BankCorrect
  2. BThe National Board for Micro, Small and Medium Enterprises
  3. CThe State Government through its Director of Industries
  4. DThe Micro and Small Enterprises Facilitation Council

Explanation

Section 10 says credit policies and practices are to be as specified in guidelines or instructions issued by the Reserve Bank from time to time. The Board under Section 5 only examines, reviews, recommends and advises, so it does not issue credit guidelines.

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