MSME Issues Must Be Discussed in All SLBC Meetings
Current · Source: Reserve Bank of India · RBI/2008-09/334 · issued 30 Dec 2008 · ~1 min read
Quick answerRBI directs all SLBC convenors to ensure MSME sector financial needs are discussed in every SLBC meeting, following the MSMED Act 2006-aligned priority sector definition change.
The rule, in the simplest words
In every SLBC (State Level Bankers' Committee – a meeting of banks in a state) meeting, bank leaders must talk about problems of MSMEs (Micro, Small and Medium Enterprises – small businesses).
MSME issues must be a regular item on the meeting list, not just sometimes.
Banks must check if they are giving enough loans on time to MSMEs, especially in special business areas called clusters.
The definition of MSME for loans must match the MSMED Act, 2006 (a law that says what counts as a small business).
How it plays out — a real example
An agri & priority-sector lending officer in Indore attends the SLBC meeting and sees 'MSME issues' as a standing agenda item. She shares that local small garment makers are struggling to get working capital loans, and the group agrees to set up a special credit camp in the textile cluster next month.
What changed
RBI has mandated that issues pertaining to the MSME sector must be included and discussed in all future SLBC meetings. This follows the earlier revision of the priority sector definition for small scale and small business enterprises to align with the MSMED Act, 2006.
What it means for you
Banks and SLBCs must now formally prioritize MSME credit challenges in their coordination meetings. This ensures state-level focus on timely and adequate credit flow to MSMEs, especially in identified clusters, as part of the broader priority sector lending framework.
What you must do
Include MSME sector issues as a standing agenda item in all SLBC meetings.
Discuss problems faced by MSMEs in your state/UT and document action points.
Review institutional arrangements for MSME credit delivery, particularly in identified clusters.
Ensure alignment with the MSMED Act, 2006 definition for priority sector classification.
SLBC convenors must ensure that MSME sector financial needs are discussed in every SLBC meeting, and problems faced by the sector are addressed.
Why was this circular issued?
To improve credit delivery to MSMEs following the alignment of the priority sector definition with the MSMED Act, 2006, as proposed in the 2007-08 Annual Policy Statement.
Does this apply to all states and union territories?
Yes, the instruction is directed to all SLBC convenors across states and union territories.
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/334
RPCD.LBS.CO.BC.No.
79 /02.01.01/2008-09
December 30, 2008
The
Chairman/Executive Director,
All SLBC Convenor Banks
(As per mailing list)
Dear
Sir/ Madam,
Inclusion of Issues pertaining to MSME
Sector in SLBC Meetings
As you are aware, the State Level Bankers'
Committee (SLBC) is a critical focal point for coordination among banks and agencies
of the State and Central Government to ensure adequate and timely flow of credit
to needy sectors.
In this connection, it may be recalled that as proposed
in para
157 of the Annual Policy Statement of 2007-08 (announced in April 2007), definition
of Small Scale Industry and Small Business Enterprises was changed for the purpose
of inclusion in priority sector in alignment with the definition adopted in the
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 and in order
to improve credit delivery to MSMEs.
Accordingly necessary instructions
have been issued to the banks to review their institutional arrangements for delivering
credit to SME Sector especially in identified clusters with a view to providing
adequate and timely credit.
In view of this, you are requested to:
ensure that adequate attention is paid to the financial
needs of MSME Sector in your State(s)/UT(s), and include
the issue and discuss the problems faced by this sector in all SLBC meetings,
in future. Please acknowledge receipt.
Yours
faithfully,
(Molina Chowdhury)
Deputy
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/334 · issued 30 Dec 2008. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (SLBC convenor banks, All scheduled commercial banks, State-level banking coordination committees, MSME borrowers), your first concrete step on “MSME Issues Must Be Discussed in All SLBC Meetings” is: “Include MSME sector issues as a standing agenda item in all SLBC meetings.” (RBI issued this 30 Dec 2008).
Circular: RBI/2008-09/334 -- MSME Issues Must Be Discussed in All SLBC Meetings
Issued: 30 Dec 2008
Action required: Include MSME sector issues as a standing agenda item in all SLBC meetings.
Action required: Discuss problems faced by MSMEs in your state/UT and document action points.
Action required: Review institutional arrangements for MSME credit delivery, particularly in identified clusters.
Action required: Ensure alignment with the MSMED Act, 2006 definition for priority sector classification.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4732&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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