As per the extant guidelines, a Micro or Small Enterprise (as defined in the MSMED Act 2006) may be said to have become Sick, if
a. Any of the borrowal account of the enterprise remains NPA for three months or more
OR
b. There is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth during the previous accounting year.
The criteria will enable banks to detect sickness at an early stage and facilitate corrective action for revival of the unit.
Posts
Comment Policy : We invite you to comment on our posts, as long as they are respectful, to the point and approving. We do not perform pre-moderation of comments. However, in order to keep this site clean and useful, we reserve the right to remove any comment that is not in accordance with our Comment Policy.