New Delhi, July 25 (KNN) The meeting of the Standing Advisory Committee (SAC) formed by the Reserve Bank of India to discuss issues concerning the micro, small and medium enterprises (MSMEs) would be held on July 28, 2016.

RBI had constituted a SAC with Deputy Governor as Chairman, officials of Ministry of MSME, Banks and Associations as members to discuss issues concerning of MSMEs.

The Committee would be examining issues relating to improving of credit to the MSME sector, difficulties & constraints being experienced and steps being taken to overcome them, etc.

The meeting has been called on July 28 and suggestions have been sought from stakeholders pertaining to the MSME sector that would require a policy intervention.

Industry body FISME would take up the issue of BLR rating which has adversely affected the lending to the MSME sector.

According to an expert, the Bank Loan Rating (BLR) prescribed by RBI on all accounts having exposure of Rs. 5 crore or more, is inherently found defective where an MSME is benchmarked with a large industry leader on parameters such as market share and other financial ratios.

It is alleged that the design of the rating agencies is flawed which gives more credence to share capital than working capital and puts MSMEs at a disadvantageous position.

Owing to large number of complaints about Credit Rating, FISME had earlier suggested RBII for setting up of a Credit Rating Ombudsman comprising of eminent experts from banking and rating industry to look at grievances from the industry, including review of credit ratings assigned by the rating agencies. (KNN Bureau)