To benefit small traders of the country, Confederation of All India Traders (CAIT) has made a strong demand for an alternate financial mechanism and strengthening of cooperative bank system and non-banking finance companies.
A CAIT delegation recently met RBI Executive Director Deepali Pant Joshi and submitted a detailed memorandum demanding strengthening of cooperative bank system and non-banking finance companies (NBFCs), which are already primarily catering to the financial needs of small traders, the apex body of the trading community said in a statement.
In its memorandum, the CAIT regretted that the core banking sector has failed to provide sufficient and efficient financial assistance to small traders and low income group, resulting into a major hindrance in smooth business activities, it said.
"Small retailers, traders, wholesalers, and people closely associated with trade sector such as small transporters, farmers, labourers etc always face the liquidity crunch. It is this sector which is cash starved and though it contributes to GDP more than corporate sector still, when the question of finances comes, this sector is almost ignored by mainstream financial institutions," it said.
In such a scenario, a large chunk of population has to arrange finances from friends and relatives or money lenders, and mortgage their assets and belongings, it added.
