Formalization of MSMEs important for financial stability of the system: RBI Deputy Governor
New Delhi, Aug 21 (KNN) To strengthen the credit bureaus, government has to make some legislative amendments, said N S Vishwanathan, Deputy Governor, Reserve Bank of India.
Delivering the key note address at the national banking summit organized by IBA and FICCI, he said that there is a need to strengthen the credit bureaus but to do that some legislative amendments are required.
He said, “We have taken several measures in that direction (strengthening credit bureaus). Some of these are in terms of expanding the database that credit bureaus require, certain legal amendments and that is a work in progress.”
Talking about Micro Small & Medium Enterprises (MSMEs), Vishwanathan said, “MSME sector plays an important role in any economy, and India is no exception. Recognizing their role as providers of employment and generators of export, the government and RBI have taken affirmative measures to strengthen the sector.”
He said, RBI has introduced the Trade Receivables electronic Discount System to address delays in recovery.
Referring to bring in more and more MSMEs into the formal sector, Vishwanathan said formalization of MSMEs is important for financial stability of the system.