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Udyam Assist Certificates Now Valid for PSL Benefits

Current · Source: Reserve Bank of India · RBI/2023-24/27 · issued 09 May 2023 · ~2 min read
Quick answerThe Government of India, via Gazette Notification, has specified that Udyam Assist Certificates are at par with Udyam Registration Certificates for Priority Sector Lending benefits, enabling informal micro enterprises without PAN/GSTIN to access PSL benefits.
The rule, in the simplest words
How it plays out — a real example

An agri & priority-sector lending officer in Indore, Mr. Kumar, is now able to provide loans to informal micro enterprises with Udyam Assist Certificates, expanding the PSL pool and improving financial inclusion. He updates his internal MSME classification policies and trains his staff on recognising UAP certificates, ensuring that systems can track and report PSL advances to IMEs separately for regulatory compliance.

What changed

The Government of India, vide Gazette Notification S.O. 1296(E) dated March 20, 2023, has specified that certificates issued via the Udyam Assist Platform (UAP) to Informal Micro Enterprises (IMEs) shall be treated at par with Udyam Registration Certificates for the purpose of availing Priority Sector Lending (PSL) benefits. IMEs are enterprises unable to register on the Udyam Registration Portal due to lack of PAN or GSTIN, and their turnover (if exempt from GST returns) is the sole criterion for UAP eligibility. An interface between UAP and Udyam Registration Portal allows IMEs to migrate once they obtain required documents.

What it means for you

Banks can now classify loans to IMEs with Udyam Assist Certificates as Priority Sector Lending under the Micro Enterprises category, expanding the PSL pool. This formalises a large segment of informal businesses, reducing credit risk and improving financial inclusion. Lenders must update their MSME classification processes to accept UAP certificates as valid proof.

What you must do

Who it affects

All commercial banks (including SFBs, LABs, RRBs), Primary (Urban) Co-operative Banks, State Co-operative Banks / District Central Co-operative Banks, All-India Financial Institutions, Non-Banking Financial Companies, Informal Micro Enterprises (IMEs) without PAN/GSTIN

❓ Common questions

What is an Informal Micro Enterprise (IME) under this circular?

An IME is an enterprise that cannot register on the Udyam Registration Portal due to lack of PAN or GSTIN. Its turnover (if exempt from GST returns) is the sole criterion for UAP eligibility.

Can we treat Udyam Assist Certificates as valid for all MSME benefits?

No, the circular specifies that UAP certificates are at par with Udyam Registration Certificates only for Priority Sector Lending (PSL) classification as Micro Enterprises.

What happens when an IME later obtains PAN or GSTIN?

An interface between UAP and Udyam Registration Portal allows IMEs to migrate from UAP to URP once they obtain the required documents, enabling full MSME benefits.

📜 Read the original circular — full text as issued by RBI
RBI/2023-24/27 FIDD.MSME & NFS.BC.No.09/06.02.31/2023-24 May 09, 2023 The Chairman/ Managing Director/Chief Executive Officer All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks) All Primary (Urban) Co-operative Banks/State Co-operative Banks / District Central Co-operative Banks All-India Financial Institutions All Non-Banking Financial Companies Dear Sir / Madam Formalisation of Informal Micro Enterprises on Udyam Assist Platform Please refer to the Circular FIDD.MSME & NFS.BC.No.4/06.02.31/2020-21 dated August 21, 2020 on ‘New Definition of Micro, Small and Medium Enterprises – clarifications’ wherein all lenders were advised to obtain ‘Udyam Registration Certificate’ for classification of entities as MSME. 2. The Ministry of Micro, Small and Medium Enterprises (‘MSME’), Government of India has launched the Udyam Assist Platform (UAP) to facilitate formalisation of Informal Micro Enterprises (IMEs) through online generation of Udyam Assist Certificate. Registration on the platform is done with the assistance of Designated Agencies which are RBI regulated entities (including scheduled commercial banks, non-banking financial companies, etc.). 3. The Government of India, vide Gazette Notification S.O. 1296(E) dated March 20, 2023 , has specified that the certificate issued on the UAP to IMEs shall be treated at par with Udyam Registration Certificate for the purpose of availing Priority Sector Lending (PSL) benefits. 4. Government of India has clarified to RBI that IMEs are those enterprises which are unable to get registered on the Udyam Registration Portal (URP) due to lack of mandatory required documents such as Permanent Account Number (PAN) or Goods and Services Tax Identification Number (GSTIN). Hence such enterprises are unable to avail the benefits of Government schemes or programmes. Further, it has been clarified that the turnover of enterprises exempted from filing returns under the provisions of the Central Goods and Services Tax Act, 2017 shall be the sole criterion to be defined as IMEs for the purpose of UAP. Accordingly, IMEs are those enterprises that are not covered in the Goods and Services Tax regime. 5. An interface has been created between the UAP and Udyam Registration Portal (URP) to enable the transition and migration of the IMEs from UAP to URP, once IMEs obtain the mandatorily required documents. 6. In view of the aforementioned notification and clarification, IMEs with an Udyam Assist Certificate shall be treated as Micro Enterprises under MSME for the purposes of PSL classification. Yours faithfully (Nisha Nambiar) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2023-24/27 · issued 09 May 2023. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
⚙️ Operations
  • Train credit and operations staff on recognising UAP certificates and verifying IME eligibility (turnover-based, no PAN/GSTIN required).
💻 IT / Systems
  • Ensure systems can track and report PSL advances to IMEs separately for regulatory compliance.
📜 Compliance
  • Update internal MSME classification policies to accept Udyam Assist Certificates as valid registration for PSL benefits.
  • Coordinate with designated agencies (e.g., banks, NBFCs) to facilitate UAP registration for eligible informal enterprises.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All commercial banks (including SFBs, LABs, RRBs), Primary (Urban) Co-operative Banks, State Co-operative Banks / District Central Co-operative Banks, All-India Financial Institutions, Non-Banking Financial Companies, Informal Micro Enterprises (IMEs) without PAN/GSTIN), your first concrete step on “Udyam Assist Certificates Now Valid for PSL Benefits” is: “Update internal MSME classification policies to accept Udyam Assist Certificates as valid registration for PSL benefits.” (RBI issued this 09 May 2023).

  1. Circular: RBI/2023-24/27 -- Udyam Assist Certificates Now Valid for PSL Benefits
  2. Issued: 09 May 2023
  3. Action required: Update internal MSME classification policies to accept Udyam Assist Certificates as valid registration for PSL benefits.
  4. Action required: Train credit and operations staff on recognising UAP certificates and verifying IME eligibility (turnover-based, no PAN/GSTIN required).
  5. Action required: Ensure systems can track and report PSL advances to IMEs separately for regulatory compliance.
  6. Action required: Coordinate with designated agencies (e.g., banks, NBFCs) to facilitate UAP registration for eligible informal enterprises.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12500&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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