FISME seeks more effective role from RBI to improve access to credit
New Delhi, Dec 16 (KNN) Federation of Indian Micro and Small & Medium Enterprises (FISME) has called for more effective intervention by the Reserve Bank of India (RBI) to improve quality of banking services and enhance credit flow to MSMEs.
The MSME body raised a number of issues that MSMEs are struggling with during the 27th Standing Advisory Committee of RBI held in Kolkata on Thursday.
Deputy Governor of RBI M.K. Jain chaired the meeting and senior officials fr0m Ministries of Finance, MSMEs and SIDBI, select invitees fr0m industry bodies were present.
On behalf of FISME, Chairman Banking Committee Neeraj Kedia and Chairman Policy Committee V.K. Agarwal made the presentation encompassing difficulties in accessing Bank credit, instant liquidation of sales bills and need to expand trade credit.
FISME sought a uniform policy and creation of desk in RBI to resolve rising number of complaints about foreclosure charges being levied by a few private sector banks.
According to FISME, delay in decision making at every step of banking process and lack of understanding of dynamics of businesses are two areas that must get the attention of RBI.
Absence of an effective grievance redressal mechanism compounded the problems, it added.
It also demanded a more pragmatic and transparent approach to address the cases of sickness for example creation of portal to apply for restructuring.
To improve the cash flow, FISME reiterated the need to strengthen TREDS platforms and suggested that NBFCs may be asked to participate to discount bills of lower rated suppliers. FISME also suggested that buyers may also be allowed to be discounted.
Keeping in view that state financial corporations have become redundant in most states, SIDBI may create independent state wide institutions to widen the outreach.
To further expand credit through trade finance, FISME suggested that in case of sales to highly rated customers and Govt, PSUs, SPSUs etc Banks and NBFCs may be encouraged to discount bills over and above MPBL of MSMEs, issue back-to-back L/Cs and finance purchase of raw material against Purchase Orders.
FISME’s dossier of suggestions covered Trade Credit, MSMEs access to capital markets, CIBIL related issues among others. (KNN Bureau)