New Delhi, Feb 14 (KNN) The North Eastern micro, small and medium enterprises (MSMEs) have demanded a separate banking Policy for the region in order to understand and meet the needs of the MSME sector.

Union Budget 2020 which was tabled in the Parliament on February 1, saw some significant announcements for MSMEs and the startup community.

Though, the announcements for MSMEs in the Budget aimed at reducing the stress on working capital requirement, for startups, however, the small businesses in North East want a dedicated policy for the region.

KNN India spoke to Federation of Industry & Commerce of North Eastern Region (FINER) Chairman RS Joshi on Friday, who asserted that North East needs a separate banking policy.

''According to us there should be a North East centric banking policy as part of greater banking policy then it will attract attention specifically. Reserve Bank of India (RBI) and MSME ministry will come to know what's happening in the region,'' he stated.

''There are couple of states in the region and government should introduce such polices. Just for a focus attention to address MSME related issues we as part of banking policy,'' he added.

Commenting on the banks attitude towards providing loans to MSMEs, Joshi asserted that compare other parts of India, here in North East, the banks refrain from doing so.

''Here banks behave differently in terms of providing loans to small businesses compare to other parts in India. They don't have willingness to do so.

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He further said that they (Banks) don't deny for loans, rather they cleverly create such situations where MSMEs themselves surrender.

''Their approach is not a positive approach. Their head office should in the region because you can't expect a person from a north east to visit their head office,'' he added.

However, he appreciated RBI's move on extending 'One-time Restructuring Scheme' for MSMEs and said that it is a good move and will surely benefit.

On 6th February, RBI had extended the One-time Restructuring Scheme for MSME by December 31, 2020.   

"Considering the importance of MSMEs in the Indian economy and for creating an enabling environment for the sector in its efforts towards formalisation, a one-time restructuring of loans to MSMEs that were in default but ‘standard’ as on January 1, 2019, was permitted without an asset classification downgrade. The restructuring of the borrower account was to be implemented by March 31, 2020,'' RBI had said in a statement.