Special credit plan for SMEs soon

P Chidambaram, Union finance minister said here on Friday, the UPA government will shortly announce a "special credit scheme for small and medium enterprises".

The minister said, "We want big industry, both foreign and Indian, but millions in the country will run small businesses."

The Centre will soon announce the details of the plan to make credit more accessible to the small businessman, he said. Targets for lending to women's self-help groups and to students will be raised this year, he said.

He also said, "Public sector banks will always remain public, but the banks must grow by themselves," at a function to celebrate the beginning of the centenary year of Canara Bank. The banks will have to merge, become global-sized and compete, he said.

Addressing some 5,000 people at the function, mostly the bank's staff and their families, he urged his Left Front coalition partners, "I ask you, staff and unions, to help the banks grow and become financial power houses and service providers."

Chidambaram said, "We have no intention of privatising these banks, but we want them to compete "" with each other and with foreign banks."

India, the minister said, didn't have a bank that figured even among the top 20 banks of the world, in terms of assets, and the largest bank in the country, SBI was only number 82.

At 37 per cent of the country's GDP, India's GDP was underfinanced by banks, he said. In other developing economies, banks financed up to 70 per cent of the GDP. "In the case of Singapore and Malaysia, it is even 130 per cent to 140 per cent."

"Lending is a bank's dharma," he said, and that is the way forward for Indian banks. This is also the way the country can reach its target of 7-8 per cent growth and "become an economic superpower".

There is a clear link between lending by the banks and the growth of the economy, he said. "Ask the millions of small traders."