The Hindu Business Line : Commercial banks urged to assist MSMEs

Commercial banks should take the requisite steps immediately, as suggested by the RBI, to help the micro, small and medium enterprises (MSMEs) in the country, as the units are facing a crisis due to economic recession and are in danger of becoming sick, according to Mr B.V Rama Rao, the president of the Federation of Andhra Pradesh Industries and a member of the empowered committee of the RBI.

In a press release issued here on Thursday, he said that it was unfortunate that “many commercial banks have not taken steps to help the MSMEs. In these times of crisis, even the bigger units are unable to survive. Therefore, it is high time the banks initiated the steps to give timely and adequate credit to the smaller enterprises.”

Commercial banks should immediately open regional MSME care centres to implement the RBI guidelines, he said. Enhancement of the timeframe for reckoning MSME accounts as NPAs from 90 days to 180 days, provision of credit at lower interest rates (currently banks are charging 14 per cent), and a liberal one-time settlement for MSMEs to settle the NPA accounts are some of the major demands of entrepreneurs, he said.

He found fault with the State Government for “completely ignoring the sector contributing a great deal to employment generation.”

He sought loans at 4 per cent (pavala vaddi) for MSMEs as for agricultural loans and loans given to the self-help groups of women. The loans should be included in the priority sector lending, he added.

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