RBI taking steps to improve credit to MSMEs


The Reserve Bank of India is taking a number of steps to ensure timely credit availability as also improving cash flow to the micro, small and medium enterprises (MSMEs) which stand as the “beacon of hope” in an otherwise difficult economic environment, RBI Deputy Governor Mr S S Mundra said at an ASSOCHAM meeting.

Addressing the Bankers’- Borrowers interaction and the panel discussion with top bankers and MSME Secretary Mr K K Jalan, the RBI Deputy Governor said the central bank is in active discussion with the government, IDBI , SIDBI and other key stakeholders for launching an electronic platform for online application of loans, tracking of the status of the application with the help of seamless availability of key information on credit worthiness and guarantee.

To be known as ‘Universal Udyami’ portal, it will have crucial links with several other related portals, eventually making life easier for the entrepreneurs and fixing responsibility of the banks, Mr Mundra said at the ASSOCHAM meeting.

Besides, the RBI has issued licences to three entities for discounting of trade receivables of the MSMEs from the large corporates including the public sector enterprises. The government has also been approached to provide a legislative back up to the process, he said.

Participating in the panel discussion, MSME Secretary said banks need to do more for sanctioning of loans well in time to the entrepreneurs. The feedback given to the government suggests that branch managers take as much as 8-9 months to process the application of the micro and small enterprises. He said , top bank managements must fix responsibilities at the branch level for such delays. Mr Jalan suggested setting up of MSME committees at the board levels of the banks for overseeing the timely disbursal of credit to the sector, which is so vital to the Indian economy. He regretted no responsibility is fixed for delays in sanctioning of loans to the small entrepreneurs. “How many managers have been charge-sheeted “for delaying the sanctions?  He said initiatives like online platform would help, adding the government is also actively reviewing the payment cycle of the PSUs to the MSMEs.

In his presentation, Chairman and Managing Director of the SIDBI, Mr Kshatrapati Shivaji said the e-portal ‘Standupmitra.in launched by Prime Minister Mr Narendra Modi yesterday would be a game-changer for the MSMEs in terms of credit availability, other statutory sanctions to the sector, wherein the applications would be tracked not only by the loan seekers but the higher-ups in different departments and the banks, including the RBI.

Moderating the panel discussion, ASSOCHAM President Mr Sunil Kanoria said while fear of CAG, CBI and CVC is coming in the way of sanctions of bank loans, the government payments also remain a big challenge for the sector. He said while an account becomes non-performing asset in 90 days, the government payments as also those from the public sector units do not materialise in three months.

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