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Measures taken to improve credit flow to
MSME Sector
Standing
advisory committee under chairmanship of Deputy Governor RBI has
been critically reviewing flow of institutional credit to MSME
sector from time to time based on this committee decisions banks
were advised by RBI to take necessary steps with regard to:
I.
Fixation of self set target by Banks for MSME as per decision of
review meeting on implementation of action points of third meeting
of standing advisory committee held in RBI on 2nd June 2003 Banks
are to consider fixing self set targets for growth in MSME advances
to MSME Sector over previous years achievement and overall trends
in growth of net Bank credit.
II.
Enhancement of composite loans limit for MSME from Rs.25 lakh to
Rs.50 lakh. In review meeting Banks agreed to enhance the limit
for composite loan from Rs.25 lakh to Rs.50 lakh. Enhancement of
the composite loan limit will facilitate MSME sector in availing of
higher quantum of Credit from Single window reducing the need for
borrowing separately from SFCs for Term Loan and Working Capital
from Banks.
III.
Incorporating credit requirement in identified clusters in banks
annual credit plans for the year 2003-04 as a follow up to
decisions of review meeting The Ministry of MSME had forwarded to
RBI list of sixty identified clusters for focused development of
MSMEs to disseminate the information to all public sector Banks. As
per RBI directives all SIBC convener Banks to initiate action for
incorporating the credit requirements in state credit annual plans
in respect of sixty clusters identified by Ministry of MSME for
focused Development of MSMEs further, as decided in meeting of
standing advisory committee held at RBI Mumabi on 1st September
2003. Banks Have been advised by RBI that credit requirement in
identified clusters to be incorporated in banks annual credit
plans for the year 2003-04.
IV.
Adequate publicity by the Banks to various scheme/facilities like availability
of collateral free/composite loan as decided in the meeting of
standing advisory committee held on 1st Sep2003 Banks have to give
adequate publicity to their schemes facilities like availability
of collateral free/ composite loans & schemes.
V.
Interest rate band of 2% above and below PLR. As per announcement
made by Hon'ble Finance Minister in Union Budget 2003-04, Indian
Banks association has advised the banks to adopt the interest rate
band of 2% above and below their prime lending rates (PLR) for
advances to MSME. |
