The implementation of the Reserve Bank of India (RBI) guidelines pertaining to the restructuring of loans advanced to the micro, small and medium enterprises (MSMEs) in the state will be monitored every month.
Since the downturn is likely to impact the MSMEs units adversely with the loans turning bad, the banks have been advised to take up restructuring of the loan accounts of MSMEs on a priority basis to help their revival.
They have been advised to increase the working capital limit for the MSMEs and explore the option of settling the non-performing assets (NPA) issues with the Lok Adalats instead of Debt Recovery Tribunal (DRT).
The District Industries Cenres (DICs) have also been advised to monitor the progress in this regard on a regular basis. The State Level Bankers’ Committee (SLBC) will convene special monthly meeting for discussion for increasing credit flow to this sector.
These issues were deliberated at the special monthly SLBC meeting on the implementation of the Indian Bank Association (IBA) package on MSME, housing and auto-sectors.
The review showed, the banks operating in Orissa extended Rs 1692.42 crore working capital loans to the new MSME units by the end of January 2009. Besides, the existing units were sanctioned Rs 405.27 crore working capital loan, taking the total loans sanctioned by these banks to Rs 2087.69 crore by January end.
After the announcement of special package for the micro, small and medium enterprises (MSMEs) and the housing sector by IBA, these banks sanctioned Rs 641.52 crore working capital loan during December 2008 (Rs 316.42 crore) and January 2009 (Rs 325.10 crore). Similarly, the banks restructured loans of about Rs 127.69 crore during April-Jan involving 1574 accounts.
Housing loans worth Rs 603.16 crore was sanctioned during the first 10 months of the current fiscal involving 20,181 accounts. Besides, auto loans of Rs 306.53 crore was sanctioned by the banks involving 7891 accounts.
Speaking on the occasion, R K Mukharjee, General Manager, Uco Bank and the convener of SLBC said, the income and employment generation can be augmented only if the MSME sector is developed. The banks are adopting the cluster based approach for financing the MSMEs to reduce their transaction costs and the credit extended to the MSME sector has been doubled in 2 years, one year ahead of the schedule.
Industry secretary Saurav Garg said, the Union government is according top priority for flow of credit to the MSME sector. The cabinet secretary will hold a video-conferencing with chief secretaries of all sates on 27 February to review the progress in this matter.
The state government is organising entrepreneurship week from 5 March 2009 and the representatives of the associations of MSMEs will participate in the event. Hemant Sharma, director (industries), S Sethy, DGM, Reserve Bank of India were present.
