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Our Bureau

MS USHA THORAT

Mumbai , Aug. 22

The Small Industries and Development Bank of India (SIDBI), in association with major banks, has been asked to set up a dedicated SME debt fund for the northeast region. Under this fund, SIDBI and the banks will jointly co-finance up to 25 per cent of project cost to first time entrepreneurs.

This is part of the recommendations by the Reserve Bank of India's Committee on Financial Sector Plan for North East Region.

The committee, chaired by RBI Deputy Governor, Ms Usha Thorat, emphasised the need for improving infrastructure, creating a favourable investment climate, focusing on few sectors of strategic advantage for development and encouraging credit culture, said the RBI press release.

Focus on north east

For the SME fund, major banks operating in the northeast region should encourage entrepreneurs who are interested in investing in agro-processing, agro-based industries and SME sector. The insurance cover of Enhancement under the Credit Guarantee Fund Trust for Small Scale Industries (CGTSI) scheme should cover 90 per cent in the northeast region, as against the risk cover of 75 per cent subject to a maximum of Rs 25 lakh available in the rest of the country, the committee said.

Other recommendations for banks operating in the northeast include providing additional households in this region with `no frills' accounts over the next four years and also offering small overdrafts or general credit cards against such accounts, in order to actively promote banking habits.

More Stories on : RBI & Other Central Banks | SSI

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