12-August-2011 16:37 IST
RBI Advises Banks to Achieve Target of 60 Percent of MSE Advances for Micro Enterprises by 2012-13
In order to ensure availability of sufficient credit to MSE Sector, Banks have been advised by RBI to achieve the following targets:
i) 60% of MSE advances for Micro Enterprises by 2012-13, to be achieved in three stages: i.e. 50% by 2011, 55% in 2012 & 60% in 2013.
ii) Banks are advised to achieve a 20% year-on-year growth in credit to micro and small enterprises.
iii) Banks are advised to achieve 10% annual growth in the number of micro enterprises accounts.
Reserve Bank of India (RBI) has reported that interest rates have been deregulated by RBI and are governed by the banks’ own lending policies. All categories of loans are henceforth priced only with reference to the Base Rate and Banks are not permitted to lend below the Base Rate with effect from 1.7.2010.
Small Industrial Development Bank of India (SIDBI) has reported that total outstanding credit to MSME in Rajasthan as on March 31, 2011 stood at Rs. 1676 crore registering a growth of 81% from previous year.
This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a Question in Lok Sabha today.
The reply of the Minister of State for Finance in the Lok Sabha regarding MSME Credit has nailed the lie of Reserve Bank of India that the Credit to the SMEs have been on the upswing. Even when subvention for export Credits- Pre-shipment and post Shipment credit for MSEs were selective and many were denied this privilege though the Finance Minister had announced this in the Budget. RBI has requested Banks to show an incremental annual growth of 10% for micro enterprises, 20% Y-o-Y Credit growth for micro, small enterprises, whose Credit to the extent of 75% is covered by Credit Guarantee Trust Corporation of DC, MSME. RBI has admonished 50% growth in Credit by 2011, 85% by 2012, 60% growth by 2013. Even the task force headed by the Principal secretary to the Prime Minister had admonished the banks for their laggard support to SMEs in the matter of credit. Further more, no credit is granted unless collateral and third party gurantees are given, against the spirit of Government policy towards SMEs. Dy Governor of RBI had stated at a meeting that SMEs were adequately financed and the credit growth showed a CAGR of20%. Will RBI check or what statutory control RBI have over banks? Is the II Schedule of the Reserve Bank of India only in paper?