COSIA submits a memorandum to FIDD-RBI, highlights issues regarding MSME
Nagpur, Feb 15 (KNN) A memorandum was submitted by Chamber of Small Industry Associations (COSIA) to the Financial Inclusion & Development Department (FIDD)-RBI highlighting issues regarding MSME industries needing financial support to the extent of Rs 2 crores without any collateral security under the CGST scheme.
MSMEs have been complaining that many banks refuse to lend financial support under this scheme and ask MSME borrowers to furnish appropriate securities against lending financial loan which becomes difficult for MSMEs.
Mayank Shukla & CA Julfesh Shah on behalf of COSIA, Vidarbha submitted a memorandum highlighting certain important financial issues relating to MSME in the anticipation of an appropriate action to ease out the financial problems to the officials of FIDD-RBI, Nagpur at a town meeting for MSME issues organised by RBI to observe Financial Literacy week.
Mayank Shukla, Chairman< COSIA Vidarbha while addressing the issues said that sorting out of the issues will help the MSME sector in capacity building & will encourage them to carry out their activities smoothly & efficiently.
Also, it addressed the issue about the MSME industries needing “Bank Guarantees” as securities during business transactions are also financially supported by the bankers. In many of the cases while dealing with government PSUs or corporate sectors, when these bank guarantees expire and there is no claim against such bank guarantees, they are not returned immediately and sometimes there is an inordinate delay in returning the original copy of bank guarantee.
As such expired bank guarantees have no importance after the validity period it should be treated as ineffective and returned back on the execution of Indemnity Bond furnished by the beneficiary MSME industry.
The memorandum further pointed out that the government has reduced Repo Rates gradually from 8% in 2014 to 5.1% till date to boost industrial growth in the country but bankers have passed on only a part of this reduction to the lenders it requested the apex bank to ensure that the reduction and Repo Rates are substantially passed on to the Industrial Borrowers.
Also the reverse Repo Rates are stagnant since October 2019, yet the banks are gradually reducing their interest rates on fixed deposits to increase their profits or adjust their earlier accumulated losses.
This practice should be stopped to protect the interest of depositors and in particulars of senior citizens who are solely dependent on this source of income only.
Suresh Satpute, General Manager, FIDD-RBI, Nagpur noted the issues & assured to take up the matter at the appropriate level. Brijesh Kumar Singh, Asst. General Manager, FIDD-RBI, CA Julfesh Shah, Sunil Sirsikar, Udayan Shrouti, R.K. Chokhani, Nischay Shells, Punit Mahajan, CA Nitin Alshi were prominently present in the meeting. (KNN/SS)