RBI plans Town Hall Meetings with Delhi MSMEs to raise credit flow

New Delhi, Jan 14 (KNN)  In a move to facilitate more credit flows to the micro, small and  medium enterprises, the Reserve Bank of India  will organise ‘Town Hall’ Meetings in the important MSME clusters of Delhi.

This was decided at the recently held Meeting of the Empowered Committee to Monitor Credit Flows to the MSME sector.

The Town Hall meetings will be open fora where senior officers from Banks and MSME borrowers will interact freely to de-bottleneck the credit flow to this priority sector of Indian economy.  During the recent review of the performance of the banks under credit flows to the MSMEs of Delhi, RBI has observed that most of the Banks could not achieve the year on year growth rate of 20 per cent, in credit flow to the micro and small enterprises, an official said.   

This minimum target was set by the Task Force constituted by the Prime Minister, some time back, to unshackle growth of the MSME sector. The Task Force made a number of recommendations. On credit flow the Task Force recommended a minimum 20 per cent  year on year growth in the outstanding credits from Banks to the micro and small enterprises of which at least 50 per cent  should flow to the micro enterprises, who have an investment upto Rs 25 lakh.

While the achievement of the above target is really poor at the all India level, even in the capital city of Delhi, with its high income level and sophisticated manufacturing and business sector, the targets could not be achieved by the Banks. In fact, performances of the large public sector Banks, whose mandate from the Government is to fully finance the priority sector, have performed badly.

Interestingly, private sector banks like HDFC and ICICI Bank which are considered to be Banks for the upper class are continuously achieving their targets, particularly in funding the micro sector.

As repeated Conference Table review of the weak performances of the banks did not yield much result, the senior officers of RBI Delhi has decided to reach the grass roots and understand the bottlenecks in the credit flow process. RBI will organise 3-4 Town Hall Meetings in important clusters of the Capital where across the table discussions will be held among the borrowers and lenders to facilitate higher credit flow to the MSMEs.

RBI has requested support from important MSME Associations like FISME to organise the meetings.