What changed
The government amended the MSME classification rules via Gazette Notification S.O. 2134(E) dated May 6, 2022. In response, RBI clarified that existing EM Part II and UAM documents obtained till June 30, 2020 shall remain valid till June 30, 2022. Additionally, the validity of documents obtained under O.M. No.12(4)/2017-SME dated March 8, 2017, for classification of MSMEs up to June 30, 2020, has been extended up to June 30, 2022.
What it means for you
Banks and lenders can continue to rely on older MSME registration documents (EM Part II/UAM) for classification purposes until end-June 2022, avoiding immediate reclassification. This provides temporary relief for MSMEs and reduces compliance burden during the transition to the new definition. Lenders should update their systems to reflect the extended validity period.
What you must do
- Update internal MSME classification systems to accept EM Part II and UAM documents as valid until June 30, 2022.
- Communicate the extended validity to MSME borrowers to prevent unnecessary documentation requests.
- Monitor for any further RBI or government notifications on permanent classification changes after June 2022.
- Ensure loan processing and reporting systems reflect the extended deadline for MSME status verification.
Who it affects
All commercial banks including SFBs, LABs, and RRBs, Primary Urban Co-operative Banks and State/District Co-operative Banks, All-India Financial Institutions, Non-Banking Financial Companies (NBFCs), MSME borrowers with EM Part II or UAM registrations
What documents are covered by this extension?
The extension applies to Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAM) obtained before July 1, 2020, as well as documents under O.M. No.12(4)/2017-SME dated March 8, 2017.
Until when are these old documents valid for MSME classification?
The validity is extended from June 30, 2020 to June 30, 2022, as per the government notification S.O. 2134(E) dated May 6, 2022.
Does this affect the new MSME classification criteria introduced in 2020?
No, this is a transitional arrangement. The new criteria remain in effect, but old registrations are temporarily accepted for classification to ease the shift.