MSMEs meet RBI Governor to address guideline implementation; leave disappointed

MSME representatives who recently met with Shaktikanta Das, newly appointed Governor of Reserve Bank of India (RBI), claim that the meeting didn’t leave them with much hope of major changes for the struggling sector, say media reports.

The MSME representatives also met with RBI Deputy Governor Mahesh Kumar Jain and Executive Director Surekha Marandi, and Arun Kumar Panda, Secretary of Ministry of MSME, during this meeting in New Delhi. Representatives from industry bodies CII, FICCI, ASSOCHAM, FISME, and LBU were also a part of the meeting.

The representatives articulated the various problems faced by the MSME sector with banks and financial institutions. The Governor and his team heard them but the concluding remarks of the Deputy Governor didn’t seem positive.

One MSME representative said, “Mere repetition of old RBI guidelines on timely decision making, collateral-free loans, credit guarantee, etc, would not change results at ground level. These are flouted by all banks with impunity. The real question should have been on how to make RBI’s own guidelines more effective”.

The Federation of Indian Micro and Small and Medium Enterprises (FISME) raised the issue of the need to have a separate track for addressing NPAs in MSMEs, focussing on non-wilful defaulters and classifying them as viable or non-viable. It also involves the necessity to focus on medium enterprises, who have exposure greater than Rs 5 crore, and address their specific problems. 

V.K. Agarwal, ex-President and Chairman of Policy Committee, FISME, said, “MSMEs should be considered at par with financial creditors, and their dues secured in restructuring or liquidation process under IBC. In its current dispensation, they are clubbed with operational creditors and they get nothing.”

Reports added that industry representatives raised issues with the insistence of collateral by banks, refusal to entertain requests for collateral-free loans under CGTMSE, high-handedness of credit rating agencies, delays in decision making, high rate of interests, and more.