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Banks asked to improve credit appraisal of borrower: RBI



With micro small and medium enterprises (MSMEs) sector assigned a greater role to play in the government’s quest to reach US $ 5 trillion economy, the Reserve Bank of India has asked banks to step up lending to small units. 

On Monday, during a meeting with bankers,  NJ Nampoothiri, general manager, RBI, Goa, said that, banks are not doing enough to address the financing needs of the MSME sector.

 “You need to reach out more and show greater sensitivity while dealing with small unit owners,” said Nampoothiri, the new general manager of RBI in the state. 

He noted that, MSME ignorance prevents them from keeping profit and loss account or in registering themselves on government portals. “Most are not in the banking fold and therefore banks become reluctant lenders to the sector,” said Nampoothiri while flagging off Financial Literacy Week 2020.

Addressing zonal heads of major bank and financial institutions, the RBI general manager noted that, Goan MSMEs like their counterpart in other states need improvement. “Most unit owners are seen to be lacking basic understanding of financial products, banking procedures and risk-return framework which inhibits their growth,” he said.

To increase lending of collateral free loans under the Prime Minister Mudra Yojana, the RBI has asked banks to improve the credit appraisal of the borrower. 

The RBI meeting was attended by almost all senior bankers, and speakers included Kamakshi Pai, chief general manager, Goa, Upasana Mazgaunkar, general manager, department of industries trade and commerce (DITC), A R Gokhe, director, MSME Development Institute, Margao, Sanjay Gupta, deputy head, SBI- Goa, Sharada Murty, zonal head, Corporation Bank, Pradeepa Bhakta, zonal head Canara Bank and Ajit Dalvi, circle head, HDFC Bank- Goa.

 The RBI is been conducting FLW since 2016 with the campaign centered around different themes. This year the focus is on MSMEs. Towards boosting the sector, the RBI will be conducting financial literacy camps across the state over the week, viz. February 10-15.

A town hall meeting between bankers and small unit owners is scheduled on February 13 in Sanquelim and camps are being conducted  in Mt Caramel College for vocational students.

With a vast network of 6.3 crore of enterprises, the MSME sector contributes about 45 per cent to the manufacturing output of the country and over 28 per cent of the GDP. Meanwhile in Goa there are estimated 40,000 MSME units.   

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