Data received from Rajya Sabha ministers indicate that MSME loans from Public Sector Banks (PSBs) restructuring has increased by 58% in the past two years affected by Covid. Though Covid is not cited as the only reason for this, it cannot be said to be the highest jump, with the year 2019 witnessing a 23-fold increase in MSME loan restructuring. The year 2020 witnessed 6.19 lakh loan accounts worth Rs 22,650 crore being restructured, while in 2021, 9.8 lakh accounts worth Rs 58,524 crore have been restructured.
Though the number of loans restructured in 2020 were less than 2019, it is being attributed to government schemes that allowed MSMEs to avoid loan restructuring. The RBI has also doubled the loan restructuring limit for MSMEs, small businesses and individuals to Rs 50 crore from Rs 25 crore under the Resolution Framework 2.0.