Finance Ministry asks banks to appoint GM-level officer to address MSME sector woes
The MSME sector has been a focus of the Narendra Modi government as it plays a critical role in promoting economic growth.
Nirmala Sitharaman, Minister of Finance and Minister of Corporate Affairs
In a bid to promote MSME sector, the government on Thursday asked banks to appoint a general manager-level official to address the problems being faced by MSMEs which contribute significantly towards employment generation and exports.
The Department of Financial Services, under the Ministry of Finance, in a circular issued to heads of all public sector banks directed that a chief general manager/general manager level officer be specifically designated for in-depth analysis of the progress made and address issues with regard to availability of credit, being faced by MSMEs.
The MSME sector has been a focus of the Narendra Modi government as it plays a critical role in promoting economic growth.
Taking forward the agenda of the Modi 2.0 government, Finance Minister Nirmala Sitharaman has asked officials to focus on inclusive growth with an objective of achieving the target of USD 5 trillion economy by 2024.
The prime minister last year announced a slew of measures, including sanction of loans of up to Rs 1 crore to MSMEs in 59 minutes through a special portal to give a boost to the nation's second biggest employing sector.
Modi had unveiled 12 measures with a view to provide access to market, technology upgradation, ease of doing business and provision of social security for employees of MSMEs. These steps are aimed at addressing the constraints faced by the sector on several fronts for the past few years.
The circular further said that while doing the analysis and corrective action, the nodal GM may collect stepwise information with regard to details of MSMEs that have taken loans from the bank, NPAs and restructuring/resolution done as per RBI circular dated January 1, 2019.
Besides, the banks have been asked to submit details of new MSMEs covered during the campaign and those still not covered by banks.
“A proforma for submitting weekly reports to Department of Financial Services is being sent separately. The campaign will be supervised by ED in-charge of MSME financing," it said.
“Needless to add that all sincere effort should be made so that during the process of formalisation, MSMEs may not suffer in want of credit which should be available to them as per the extant guidelines,” it added.
Earlier this June and leading up to the Budget 2019-20, the Finance Ministry led by Nirmala Sitharaman was said to be considering fiscal incentives such as interest rate subvention and lower tax rates for up to certain turnover threshold for key MSME sectors.
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