Question

    As per the Nayak committee, what percentage of its

    annual projected turnover should an MSME get as working capital from a bank?
    A 10% Correct Answer Incorrect Answer
    B 15% Correct Answer Incorrect Answer
    C 20% Correct Answer Incorrect Answer
    D 25% Correct Answer Incorrect Answer
    E 30% Correct Answer Incorrect Answer

    Solution

    The Nayak Committee was set up by the Reserve Bank of India in December 1991 to review the working capital requirements of small and medium-sized enterprises (MSMEs). The committee recommended that MSMEs should have 20% of their annual projected turnover as working capital.  Note - the working capital requirement of the MSME unit is calculated at 25% of the annual projected turnover. Out of the said Working Capital requirement: • 5% requirement to be met by the borrower from his own sources, and  • the balance 20% to be financed by a lending bank  They also recommended that banks grant working capital to MSMEs, dispose of loan applications in a timely manner, and set up specialized bank branches for MSME loans.

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