Now Reading: CEA seeks flexible MSME loan norms, flags microfinance over-lending
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CEA seeks flexible MSME loan norms, flags microfinance over-lending
Chief Economic Adviser V Anantha Nageswaran on Friday, 9 October 2026, called for flexible loan overdue norms for classifying MSMEs as Special Mention Accounts (SMAs), arguing that a uniform 90-day timeline does not suit businesses with different cash flow cycles. "The moment you are classified as SMA, then you almost end up becoming already de facto, if not de jure, NPA," he said at Sa-Dhan's National Conference. He urged norms aligned with Indian business practices rather than a global benchmark.
At the same conference, Nageswaran warned microfinance institutions to avoid over-lending, saying the sector has reversed the priority order of savings, insurance and credit. The Economic Times added that the Finance Ministry backs a review of NPA norms, and that the Cabinet Secretary has pushed deregulation for MSMEs. The EU-India trade agreement will become operational in two months, he noted. Sa-Dhan's Bharat Microfinance Report shows an 11 per cent contraction in the microfinance loan book in FY26.
Indian Opinion Analysis
Both outlets report the CEA's call for flexible SMA norms for MSMEs and his warning against microfinance over-lending, with near-identical quotes. Business Standard leads with the SMA plea and gives equal weight to the microfinance caution, closing on the sector's loan-book contraction. Economic Times leads with the NPA classification request, then adds the Finance Ministry's advocacy, deregulation efforts, AI upskilling, and trade agreement deadlines, notably the EU deal going operational in two months. Neither source criticises the government or the RBI, both treat the CEA's remarks as constructive policy proposals. The Economic Times report, by contextualising the remarks within ministry backing and ongoing deregulation, tilts more toward a pro-government framing. The balanced read is that the CEA offered two substantive policy suggestions: ease MSME credit norms and prevent microfinance over-lending, with no timeline set for regulatory action.
Coverage: 2 sources, 1 pro-government, 1 neutral
Sources (2): business-standard.com (neutral report), economictimes.indiatimes.com (pro government)
This brief was synthesised by AI from the 2 sources linked above, so one read covers every framing they carry. Methodology and corrections.
