RBI asks banks to reclassify MSMEs

The RBI has asked banks, financial institutions and NBFCs to reclassify micro, small and medium enterprises on the basis of the new criteria. Last month, the government notified new criteria for classification of MSMEs on the basis of turnover and investment in plant and machinery. "We advise you to initiate necessary action for reclassification of enterprises as per the new definition w.e.f July 1, 2020 and issue necessary instructions.”