Against the backdrop of evolving credit and policy reforms, the central bank has reiterated the need for stronger foundations within India’s MSME sector to ensure sustained growth and stability.
Sanjay Malhotra, Governor of the Reserve Bank of India, said micro, small and medium enterprises should focus on formalisation, maintain credit discipline, and adopt digital payment systems to strengthen long-term resilience and competitiveness. He made these remarks during a meeting with select MSMEs and representatives of MSME associations in Mumbai.
The Governor highlighted the critical role played by MSMEs in India’s economic framework, noting their significant contribution to GDP, exports, and employment generation across the country. He stressed that ensuring timely and adequate access to formal credit for MSMEs continues to be a key policy priority for the Reserve Bank.
Malhotra also outlined various policy and regulatory steps taken by both the Government of India and the Reserve Bank to support the sector. He pointed out that MSMEs accounted for 33% of banks’ credit to the industry segment as of December-end 2025, while large enterprises accounted for the remaining 67%.
On formalisation, the Governor explained that MSMEs lacking mandatory documents such as PAN or Goods and Services Tax Identification Number can register on the Udyam Assist Platform. Formalisation through this platform allows such enterprises to become part of the formal financial system.
Once registered, MSMEs receive the Udyam Registration Certificate, issued through the Udyam Assist Platform, which is managed by SIDBI. This registration enables them to access loans under banks’ priority sector lending norms, improving their ability to secure institutional finance.
The Reserve Bank views these steps as essential for enhancing credit flow, strengthening compliance, and building a more resilient MSME ecosystem over the long term.
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