Banks asked to ensure timely credit to MSMEs
28 Jun 2019
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The government has asked heads of all public sector banks to do an in-depth analysis of the progress made in making available much needed credit to micro, small and medium enterprises and the issues still hampering credit flow to these units.
The government has asked bank chiefs to make all out and sincere efforts to ensure that during the process of formalisation, the MSMEs may not suffer for want of credit, which should be available to them as per the extant guidelines.
MSMEs form an important component of the Indian economy and contribute significantly to the country’s GDP through exports, industrial output, employment generation etc. However, during the past few years, the sector has been facing constraints on several fronts.
An MSME outreach initiative launched by Prime Minister Narendra Modi on 2 November 2018 aims to provide access to credit, access to market, technology up-gradation, ease of doing business and a sense of security for MSMEs and its employees.
In order to take the initiative further and consolidate gains of the outreach campaign, the government asked the chairman of SBI and MDs and CEOs of all public sector banks (PSBs), that a CGM/GM level officer may be specifically designated to do an in-depth analysis of the progress made and issues in availability of credit, still being faced by the MSMEs. While doing the analysis and corrective action thereof, the nodal GM may, inter alia, collect stepwise information on the following:
- Details of MSMEs that are taking credit from the bank;
- Details of MSME accounts that are NPA;
- Details of MSME accounts where restructuring/ resolution has been done as per RBI circular dated 1 January 2019;
- Details of new MSMEs covered during the campaign: and
- Details of MSMEs still uncovered;
Banks have been asked to submit weekly proforma reports on the progress to Department of Financial Services (DFS) in the finance ministry. The campaign will be supervised by ED in-charge of MSME financing.
The heads of all PSBs have also been asked to make sincere efforts during the process of formalisation of loans, so that MSMEs may not suffer for want of credit.
