Banks should address data quality, which is a key for sustainable growth and they should also look at MSME sector for the growth, according to a Reserve Bank of India official.
In his keynote address at Credit Information Bureau (India) ltd (CIBIL) seminar on "Increasing credit penetration and improved asset quality" N S Vishwanathan, regional director, RBI, said, "When it comes to credit infor about the borrower is the key and how to reduce cost. Quality of information is key in retail segment, which is growing fast.
"Data quality is the major issue, while we see quantity, depth, coverage of data are increasing."
He noted there are examples where banks have given loans to companies, which have fabricated their balance sheet.
On the sustainable growth, he said, MSME segment should be one of the thrust areas for the growth and for financial inclusion.
He added credit penetration for this segment is only seven per cent, while the rest still depends on the unorganised.
To address this segment solid database is required. In Tamil Nadu the regulator is talking to various MSME associations to find out how many of the members of these associations have availed Banking credit.
:The bBanks have seen this segment always a risky one. for instance, when a SME account get into trouble the Banks look at only how to recover, but not how to revive," he said.
