The MSME sector has said that banks were not being transparent in their dealing with the sector.
“The issue is not merely about not getting timely finance. Service charge levy is exorbitant and varies from one bank to another, bankers fail to understand the industry's sufferings during troubled times, extend no interest concession to small entrepreneurs,' an entrepreneur engaged in the manufacture of engineering goods told Business Line .
Yet another businessman brought up the issue of cheque book charges.
He said, “we do not charge our customers for raising the invoice. Why should banks impose a charge for issuing acheque book, for factory visit and inspection?
There is no basis to determine the imposition of such charges.'
Small entrepreneurs also expressed resentment about banks not providing an acknowledgment of the documents submitted for clearance of any proposal.
Interactive session
The list seemed long and the discussion that followed with the RBI and bank officials lasted for over three hours. It was an interactive session on banking problems with the RBI and bank officials arranged by the Coimbatore District Small Industries Association (Codissia).
The Codissia President, Mr M. Kandhaswami, in a memorandum to the Deputy General Manager of Reserve Bank in Chennai, Mr S. Selva Raj, explained the various problems that the association members faced such as sensitising and training bank officials on the Credit Guarantee Fund Scheme for Micro and Small Enterprises for providing loan up to Rs 1 crore without collateral, the Credit Linked Capital Subsidy Scheme and proper implementation of various schemes.
TUF scheme
The members also requested the official to take up the issue of extending the TUF scheme, presently covering the textile and jute industries, for the MSMEs at 5 per cent interest. “There is lack of technology advancement in the engineering units operating in the MSME sector. By extending the TUF scheme to this sector, the production lines can be upgraded, improved,” the Codissia Honorary Secretary, Mr S. Surulivel, said.
The members insisted that there should be a separate chapter for the MSME sector in the RBI's Monetary Policy.
Bankers concluded the session by telling the participants (numbering around 50) that ‘customers should exercise their right to seek information from banks.'