MSMEs not upbeat after meeting with RBI Governor
New Delhi, Jan 9 (KNN) Shaktikanta Das, the newly appointed Governor of Reserve Bank of India, met MSME representatives in New Delhi recently. He was flanked by Deputy Governor Mahesh Kumar Jain and Executive Director Surekha Marandi from RBI and Secretary MSME, Government of India, Dr. Arun Kumar Panda.
The Governor and his team gave a patient hearing to representatives of industry associations who articulated various problems faced by them with banks and financial institutions.
However, the impression gathered by MSME representatives from the concluding remarks of Deputy Governor, RBI left them little hope of any major change in the situation.
As one of the representatives summed up the mood after the meeting, “Mere repetition of age old RBI guidelines, what the Deputy Governor did, on timely decision making, collateral free loans, Credit Guarantee etc would not change results at ground as these are flouted by all banks with impunity, question was how to make RBI’s own guidelines more effective”.
Most industry representatives raised issue of insistence of collateral by banks, refusal to entertain request for collateral free loan under CGTMSE, high handedness of credit rating agencies, delays in decision making, high rate of interests among others.
Federation of Indian Micro and Small & Medium Enterprises (FISME) raised several issues especially the need to have a separate track for addressing NPAs in MSMEs focusing on non-wilful defaulters and classifying them into viable and non-viable; necessity to focus on Medium enterprises (exposure greater than Rs. 5 Crore) also, addressing their specific problems related to BLR-external credit rating and demand of additional collateral securities during growth and non-fund based limits.
Raising an important issue related to Insolvency and Bankruptcy Code (IBC), V.K. Agarwal, former President FISME and Chairman of its Policy Committee said, “MSMEs should be considered at par with Financial Creditors and their dues secured in restructuring or liquidation process under IBC as in its current dispensation they are clubbed with operational creditors and they get nothing”.
To ease MSMEs’ access to non-fund based finance, FISME also suggested to consider allowing Insurance companies to offer bank guarantees as is the case in many other countries.
The National General Secretary of Laghu Udyog Bharti (LBU) Govind Lele asked to include non-GST registered units also in the new restructuring scheme announced by RBI recently. LBU also demanded that only basic lending rate of interest should be charged from MSMEs.
The industry bodies present during the interaction with RBI Governor included CII, FICCI, ASSOCHAM, FISME, LBU among others.