Streamline ME-Card rollout, raise PSL cap to Rs 1 crore: PHDCCI urges RBI

New Delhi, July 28 The PHD Chamber of Commerce and Industry (PHDCCI) met the Reserve Bank of India Governor, Sanjay Malhotra, on Monday and suggested that the Micro Credit Facility Cards (ME-Cards) proposed in the Union Budget be streamlined and rolled out at the earliest.

ME-Cards were proposed as digital, tailored credit products specifically for microenterprises registered on the Udyam portal. Each card has a credit limit of up to Rs 5 lakh.

The industry chamber said that the cap on ‘Priority Sector Lending’ (PSL) classification for credit through NBFCs should be increased from the current Rs 20 lakh to Rs 1 crore.

Further, the interest equalisation scheme should be extended to include service exporters, PHDCCI suggested. Currently exporters in manufacturing sector receive a subsidy on the interest rates charged on their pre-shipment and post-shipment export credit under the interest equalisation scheme.

It suggested faster clearance of cheques deposited by MSMEs within a 24-48 hour credit window.

The industry body recommended renaming ME cards to distinguish them from consumer credit cards. The chamber also called for standardising issuance procedures, ensuring interest rate caps and launching a centralised portal for monitoring card applications.

These recommendations aim to enhance credit access, regulatory support, and financial efficiency for India's Micro, Small, and Medium Enterprises (MSMEs). The Chamber appreciated Centre’s move to expand credit guarantee schemes for MSMEs and urged the RBI to ensure effective implementation.

It requested RBI to create designated helpdesks at field offices level to support MSMEs facing credit access challenges.

The industry chamber also emphasised the need to digitise and standardise banking documentation across institutions to reduce physical paperwork and promote transparency.

Other recommendations include regulatory intervention against unfair practices by credit rating agencies and revision of NPA classification criteria -- an extension of the overdue threshold from 90 to 180 days to reflect realistic MSME working capital cycles

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