The Reserve Bank of India is taking several steps to ensure timely credit and improved cash flow to micro, small and medium enterprises (MSMEs).
This was stated by RBI Deputy Governor SS Mundra at a ‘Bankers-Borrowers’ interaction organised by industry body Assocham on Wednesday.
Mundra said that the central bank is in discussion with the government, SIDBI and other key stakeholders for launching an electronic platform for online application of loans and tracking of the status of the applications with the help of seamless availability of key information on creditworthiness and guarantee.
To be known as ‘Universal Udyami’ portal, it will have crucial links with several other related portals, eventually making life easier for entrepreneurs and fixing responsibility on banks, he said.
Besides, the RBI has issued licences to three entities for discounting of trade receivables of MSMEs from the large corporates, including the public sector enterprises. The government has also been approached to provide a legislative backup to the process, Mundra said.
Banks need to do more MSME Secretary KK Jalan said banks need to do more for sanctioning of loans well in time to entrepreneurs. The feedback given to the government suggests that branch managers take as many as eight to nine months to process the application of micro and small enterprises.
He said that top bank managements must fix responsibilities at the branch level for any delays in sanctioning of credit to MSMEs. Jalan suggested setting up of MSME committees at the bank board levels for overseeing the timely disbursal of credit to the sector, which is vital to the Indian economy.
SIDBI’s Chairman and Managing Director Kshatrapati Shivaji said the e-portal ‘Standupmitra.in’ launched by Prime Minister Narendra Modi on Tuesday would be a game-changer for MSMEs.
Assocham President Sunil Kanoria said that fear of CAG, CBI and CVC — which he referred as the 3Cs — is coming in the way of sanction of bank loans. He also said that government payments remain a big challenge for the sector.
While an account becomes an non-performing asset in 90 days, the government payments as also those from the public sector units do not materialise in three months, he noted.
Panama papers On the recent Panama Papers expose, Mundra said the government has already announced setting up of a task force in which the RBI is going to be a part of it.
“It would be too hasty to jump to a conclusion that everything is illegitimate or everything is legitimate. There would be all kinds of cases. Once the details are available, we will look into the evidence along with the team. Then it would be fair to reach to a conclusion,” Mundra told newspersons here.
Monetary transmission Expressing confidence that monetary transmission would more effective this time round, Mundra said: “The MCLR (marginal cost of funds based lending rate) regime has come into force from April 1. This and other liquidity measures are bound to result in more effective transmission this time.”
Mundra said that it would be unfair to say that nothing has been transmitted after the earlier rounds of policy rate reductions last year.
“The extent of transmission has certainly been lower than expected. The transmission this time should be more effective,” Mundra said.
Srivats.kr@thehindu.co.in