Thousands of entrepreneurs in the micro, small and medium enterprises (MSME) sector in Orissa may go on a prolonged mass agitation in the first week of September to protest the alleged harassment and step-motherly treatment meted out to them by the Orissa circle of the State Bank of India (SBI).
Though the state MSME association held a meeting with the officials of the SBI Orissa circle on August 9 for redressal of their grievances, the talks failed.
Following the failure, the state MSME association placed its demands in a letter to the SBI chairman on August 10. More than 80 per cent of Orissa MSMEs are assisted by SBI.
Gauri Sankar Dash, secretary general, Orissa Assembly of Small and Medium Enterprises (OASME), said: “The Orissa circle SBI officials said they were not in a position to fulfil our demands. We are now awaiting the SBI chairman’s response. The Orissa MSME association will go for a prolonged agitation from the first week of September if our demands are not met.”
The association’s demands include rehabilitation of all ailing units by the SBI according to the RBI guidelines instead of invoking the Securitisation Act, review of all cases pending in Debts Recovery Tribunal, reorganisation of the Sick Unit Cell within the state by the SBI authorities and that the decision of the State Level Inter Institutional Committee (SLIIC) be made binding on all agencies including the SBI.
“At a time when the central government wants the MSMEs to flourish and has even permitted foreign direct investment in the MSME sector, the SBI Orissa circle is in a vindictive mood and is in a hurry to close down all MSME units which had borrowed money from the bank,” said a release issued by the coordination committee of the state MSME industry association.
Niranjan Mohanty, chairman, Utkal Chamber of Commerce and Industry, said: “There was a time when SBI was a leading financer of MSMEs in Orissa but of late, the bank’s attitude, systems and management have undergone a big change. The SBI needs to comply with the RBI guidelines and take a positive attitude towards the rehabilitation of ailing MSME units.”
“Around 75 per cent of the 38,866 MSME units in Orissa have availed finance from the SBI and the bank should look at revival of the ailing units instead of invoking the Securitisation Act to kill all the ailing units,” he added.
Thakur Pradhan, assistant general manager, SBI (SME cell) Orissa circle, refuted the allegations. He said the SBI has always made its best efforts to rehabilitate the ailing MSMEs and invoking the Securitisation Act was only the last recourse.
“An MSME unit is given the non-performing asset (NPA) status only when it has been unable to settle its outstanding dues within 90 days, which is in accordance with the Basel-II norms fixed by the RBI. The process of restructuring of ailing MSME units is decided on the basis of a viability study conducted by SBI and all units with potential to grow are revived ,” Pradhan told Business Standard.
